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GOVERNMENT  PUBUCATIC   IS 

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REPORTS 


SECRETARY  OF  THE  TREASURY 


UNITED  STATES, 


PREPARED 


IN  OBEDIENCE  TO  THE  ACT  OF  THE  10th  MAY,  1800, 

Supplementary  to  the  ad,  entitled  *  An  act  to  establish  the  Treasury  Department. 


TO  WHICH  ARE  PREFIXED, 


THE  REPORTS  OF  ALEXANDER  HAMILTON, 

ON 

UBLIC  CREDIT,  ON  A  NATIONAL  BANK,  ON  MANUFACTURES, 


AND   ON  THE 


ESTABLISHMENT  OF  A  MINT. 


VOL.  I.         *$' 


^i 


PRINTED  BT  ORDER  OF  THE  SENATE  OF  THE  UNITED  STATES 


WASHINGTON: 

PRINTED  BY  DUFF  GREEN. 


1828. 


IN  SENATE  OF  THE  UNITED  STATES. 
Thursday,  February  7,   1828. 


Resolved^  That  the  Secretary  of  the  Senate  cause  to  be  printed  and  bound, 
six  hundred  copies  of  the  Annual  Reports  of  the  Secretary  of  the  Treasury, 
including  the  Reports  of  Mr.  Hamilton;  and  to  cause  an  Index  to  be  prepared 
for  the  same;  and  that  the  expense  thereof  be  paid  out  of  the  Contingent 
Fund. 

Attest: 

WALTER  L0WR1E,  gecretary. 


i 


TABLE  OF  CONTENTS. 


Page- 

Reports  by  Mr.  Hamilton  on  Public  Credit,             January,      1790  3 

National  Bank,            December,    1790  54 

Manufactures,             December,    1791  78 

Establishing  a  Mint,  May,             1791  133 

Public  Credit,               January,       1795  157 

Gallatin  on  the  Finances,                 December,    1801  216 

December,    1802  252 

October,        1803  262 

November,  1804  285 

December,  1805  297 

December,    1806  331 

November,  1807  356 

December,   1808  373 

June,             1809  391 

December,   1809  398 

December,   1810  421 

November,  1811  443 

December,    1812  468 

William  Jones,  (Acting  Secretary,)  June,            1813  488 

Decemler,  1813  499 

G.  W.  Campbell,                                December,  1814  523 


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ilF.POUT* 


SECRETARY  OF  THE  TREASURY  OF  THE  UNITED  STATED. 


ON  PUBLIC  CREDIT. 

Treasury  Department,  January  9,  1790. 

The  Secretary  of  the  Treasury  >  in  obedience  to  the  resolution  of  the  House 
of  Representatives  of  the  twenty-first  day  of  September  last,  has,  during  the 
recess  of  Congress,  applied  himself  to  the  consideration  of  a  proper  plan  for 
the  support  of  the  public  credit,  with  all  the  attention  which  was  due  to  the 
authority  of  the  House,  and  to  the  magnitude  of  the  object. 

In  the  discharge  of  this  duty,  he  has  felt,  in  no  small  degree,  the  anxie- 
ties which  naturally  flow  from  a  just  estimate  of  the  diflficulty  of  the  task,, 
from  a  well  founded  diffidence  of  his  own  qualifications  for  executing  it 
with  success,  and  from  a  deep  and  solemn  conviction  of  the  momentous  na- 
ture of  the  truth  contained  in  the  resolution  under  which  his  investigations 
have  been  conducted,  li  That  an  adequate  provision  for  the  support  of  the 
Public  Credit  is  a  matter  of  high  importance  to  the  honor  and  prosperity 
of  the  United  States." 

With  an  ardent  desire  that  his  well  meant  endeavors  may  be  conducive 
to  the  real  advantage  of  the  nation,  and  with  the  utmost  deference  to  the 
superior  judgment  of  the  House,  he  now  respectfully  submits  the  result  of 
his  inquiries  and  reflections  to  their  indulgent  construction. 

In  the  opinion  of  the  Secretary,  the  wisdom  of  the  House,  in  giving 
their  explicit  sanction  to  the  proposition  which  has  been  stated,  cannot  but 
be  applauded  by  all  who  will  seriously  consider  and  trace,  through  their 
obvious  consequences,  these  plain  and  undeniable  truths: 

That  exigencies  are  to  be  expected  to  occur,  in  the  affairs  of  nations,  in 
which  there  will  be  a  necessity  for  borrowing; 

That  loans  in  times  of  public  danger,  especially  from  foreign  war,  are 
found  an  indispensable  resource,  even  to  the  wealthiest  of  them; 

And  that  in  a  country  which,  like  this,  is  possessed  of  little  active  wealth, 
or,  in  other  words,  little  monied  capital,  the  necessity  for  that  resource  must, 
in  such  emergencies,  be  proportionably  urgent. 

And  as,  on  the  one  hand,  the  necessity  for  borrowing  in  particular  emer- 
gencies cannot  be  doubted,  so,  on  the  other,  it  is  equally  evident,  that  to  be 
able  to  borrow  upon  good  terms,  it  is  essential  that  the  credit  of  a  nation, 
should  be  well  established. 

For,  when  the  credit  of  a  country  is  in  any  degree  questionable,  it  never 
fails  to  give  an  extravagant  premium,  in  one  shape  or  another,  upon  all  the 
loans  it  has  occasion  to  make.  Nor  does  the  evil  end  here;  the  same  disad-- 
vantage  must  be  sustained  upon  whatever  is  to  be  bought  on  terms  of  future 
payment. 


REPORTS  OF  THE 


[179a 


From  this  constant  necessity  of  borrowing  and  buying  dear,  it  is  easy  to 
conceive  how  immensely  the  expenses  of  a  nation,  in  a.  course  of  time,  will 
be  augmented  by  an  unsound  state  of  the  public  credit. 

To  attempt  to  enumerate  the  complicated  variety  of  mischiefs  in  the 
whole  system  of  the  social  economy,  which  proceed  from  a  neglect  of  the 
maxims  that  uphold  public  credit,  and  justify  the  solicitude  manifested  by 
the  House  on  this  point,  would  be  an  improper  intrusion  on  their  time  and 
patience. 

In  so  strong  a  light,  nevertheless,  do  they  appear  to  the  Secretary,  that 
on  their  due  observance  at  the  present  critical  juncture,  materially  depends, 
in  his  judgment,  the  individual  and  aggregate  prosperity  of  the  citizens  of 
the  United  States;  their  relief  from  the  embarrassments  they  now  experi- 
ence; their  character  as  a  people;  the  cause  of  good  government. 

If  the  maintenance  of  public  credit,  then,  be  truly  so  important,  the  next 
inquiry  which  suggests  itself  is,  by  what  means  it  is  to  be  effected.  The 
ready  answer  to  which  question  is,  by  good  faith,  by  a  punctual  perform- 
ance of  contracts.  States,  like  individuals,  who  observe  their  engagements, 
are  respected  and  trusted;  while  the  reverse  is  the  fate  of  those  who  pursue 
an  opposite  conduct. 

Every  breach  of  the  public  engagements,  whether  from  choice  or  neces- 
sity, is,  in  different  degrees,  hurtful  to  public  credit.  When  such  a  neces- 
sity does  truly  exist,  the  evils  of  it  are  only  to  be  palliated  by  a  scrupulous 
attention  on  the  part  of  the  government,  to  carry  the  violation  no  further 
than  the  necessity  absolutely  requires,  and  to  manifest,  if  the  nature  of  the 
case  admit  of  it,  a  sincere  disposition  to  make  reparation  whenever  circum- 
stances shall  permit.  But,  with  every  possible  mitigation,  credit  must  suffer, 
and  numerous  mischiefs  ensue.  It  is,  therefore,  highly  important,  when  an 
appearance  of  necessity  seems  to  press  upon  the  public  councils,  that  they 
should  examine  well  its  reality,  and  be  perfectly  assured  that  there  is  no 
method  of  escaping  from  it,  before  they  yield  to  its  suggestions.  For, 
though  it  cannot  safely  be  affirmed  that  occasions  have  never  existed,  or  may 
not  exist,  in  which  violations  of  the  public  faith,  in  this  respect,  are  inevita- 
ble; yet  there  is  great  reason  to  believe  that  they  exist  far  less  frequently 
than  precedents  indicate;  and  are  oftenest  either  pretended  through  levity  or 
want  of  firmness,  or  supposed,  through  want  of  knowledge.  Expedients 
might  often  have  been  devised  to  effect,  consistently  with  good  faith,  what 
has  been  done  in  contravention  of  it.  Those  who  are  most  commonly  cre- 
ditors of  a  nation,  are,  generally  speaking,  enlightened  men;  and  there  are 
signal  examples  to  warrant  a  conclusion,  that  when  a  candid  and  fair  appeal 
is  made  to  them,  they  will  understand  their  true  interest  too  well  to  refuse 
their  concurrence  in  such  modifications  of  their  claims,  as  any  real  necessity 
may  demand. 

While  the  observance  of  that  good  faith  which  is  the  basis  of  public  cre- 
dit, is  recommended  by  the  strongest  inducements  of  political  expediency, 
it  is  enforced  by  considerations  of  still  greater  authority.  There  are  argu- 
ments for  it  which  rest  on  the  immutable  principles  of  moral  obligation. 
And  in  proportion  as  the  mind  is  disposed  to  contemplate,  in  the  order  of 
Providence,  an  intimate  connexion  between  public  virtue  and  public  happi- 
ness, will  be  its  repugnancy  to  a  violation  of  those  principles. 

This  reflection  derives  additional  strength  from  the  nature  of  the  debt  of 
the  United  States.  It  was  the  price  of  liberty.  The  faith  of  America  has 
been  repeatedly  pledged  for  it,  and  with  solemnities  that  give  peculiar  force 


1790.] 


SECRETARY  OF  THE  TREASURY. 


to  the  obligation.  There  is,  indeed,  reason  to  regret  that  it  has  not  hitherto 
been  kept;  that  the  necessities  of  the  war,  conspiring  with  inexperience  in  the 
subjects  of  finance,  produced  direct  infractions;  and  that  the  subsequent  pe- 
riod has  been  a  continued  scene  of  negative  violation,  or  non-compliance. 
But  a  diminution  of  this  regret  arises  from  the  reflection  that  the  last  seven 
years  have  exhibited  an  earnest  and  uniform  effort  on  the  part  of  the  govern- 
ment of  the  Union,  to  retrieve  the  national  credit,  by  doing  justice  to  the 
creditors  of  the  nation;  and  that  the  embarrassments  of  a  defective  Constitu- 
tion, which  defeated  this  laudable  effort,  have  ceased. 

From  this  evidence  of  a  favorable  disposition  given  by  the  former  govern- 
ment, the  institution  of  a  new  one,  clothed  with  powers  competent  to  call- 
ing forth  the  resources  of  the  community,  has  excited  correspondent  expec- 
tations. A  general  belief  accordingly  prevails,  that  the  credit  of  the  United 
States  will  quickly  be  established  on  the  firm  foundation  of  an  effectual  pro- 
vision for  the  existing  debt.  The  influence  which  this  has  had  at  home,  is 
witnessed  by  the  rapid  increase  that  has  taken  place  in  the  market  value  of 
the  public  securities.  From  January  to  November,  they  rose  thirty-three 
and  a  third  per  cent.,  and  from  that  period  to  this  time,  they  have  risen  fifty 
per  cent,  more;  and  the  intelligence  from  abroad  announces  effects  propor- 
tionably  favorable  to  our  national  credit  and  consequence. 

It  cannot  but  merit  particular  attention,  that  among  ourselves,  the  most  en- 
lightened friends  of  good  government  are  those  whose  expectations  are  the 
highest. 

To  justify  and  preserve  their  confidence  to  promote  the  increasing  respec- 
tability of  the  American  name;  to  answer  the  calls  of  justice;  to  restore 
landed  property  to  its  due  value;  to  furnish  new  resources,  both  to  agricul- 
ture and  commerce;  to  cement  more  closely  the  union  of  the  States;  to  add 
to  their  security  against  foreign  attack;  to  establish  public  order  on  the  basis 
of  an  upright  and  liberal  policy — These  are  the  great  and  invaluable  ends 
to  be  secured  by  a  proper  and  adequate  provision,  at  the  present  period,  for 
the  support  of  public  credit. 

To  this  provision  we  are  invited,  not  only  by  the  general  considerations 
which  have  been  noticed,  but  by  others  of  a  more  particular  nature.  It  will 
procure  to  every  class  of  the  community  some  important  advantages,  and  re- 
move some  no  less  important  disadvantages. 

The  advantage  to  the  public  creditors  from  the  increased  value  of  that 
part  of  their  property  which  constitutes  the  public  debt,  needs  no  expla- 
nation. 

But  there  is  a  consequence  of  this,  less  obvious,  though  not  less  true,  in 
which  every  other  citizen  is  interested.  It  is  a  well  known  fact,  that  in 
countries  in  which  the  national  debt  is  properly  funded,  and  an  object  of 
established  confidence,  it  answers  most  of  the  purposes  of  money.  Transfers 
of  stock  or  public  debt,  are  there  equivalent  to  payments  in  specie;  or,  in 
other  words,  stock  in  the  principal  transactions  of  business,  passes  current 
as  specie.  The  same  thing  would,  in  all  probability,  happen  here  under 
the  like  circumstances. 

The  benefits  of  this  are  various  and  obvious: 

First.  Trade  is  extended  by  it,  because  there  is  a  larger  capital  to  carry 
it  on,  and  the  merchant  can,  at  the  same  time,  afford  to  trade  for  smaller 
profits;  as  his  stock,  which,  when  unemployed,  brings  him  in  an  interest 
from  the  government,  serves  him  also  as  money  when  he  has  a  call  fpr  it 
in  his  commercial  operations. 


6  REPORTS  OF  THE  [1790, 

Secondly.  Agriculture  and  manufactures  are  also  promoted  by  it,  for  the 
like  reason,  that  more  capital  can  be  commanded  to  be  employed  in  both; 
and  because  the  merchant,  whose  enterprise  in  foreign  trade  gives  to  them 
activity  Tend  extension,  has  greater  means  for  enterprise. . 

Thirdly.  The  interest  of  money  will  be  lowered  by  it;  for  this  is  always 
in  a  ratio  to  the  quantity  of  money,  and  to  the  quickness  of  circulation. 
This  circumstance  will  enable  both  the  public  and  individuals  to  borrow  on 
easier  and  cheaper  terms. 

And  from  the  combination  of  these  effects,  additional  aids  will  be  furnished 
to  labor,  to  industry,  and  to  arts  of  every  kind.  But  these  good  effects  of 
a  public  debt  are  only  to  be  looked  for,  when,  by  being  well  funded,  it  has 
acquired  an  adequate  and  stable  value;  till  then,  it  has  rather  a  contrary  ten- 
dency. The  fluctuation  and  insecurity  incident  to  it  in  an  unfunded  state, 
render  it  a  mere -commodity,  and  a  precarious  one.  As  such,  being  only  an 
object  of  occasional  and  particular  speculation,  all  the  money  applied  to  it 
is  so  much  diverted  from  the  more  useful  channels  of  circulation,  for.  which 
the  thing  itself  affords  no  substitute;  so  that,  in  fact,  one  serious  inconveni- 
ence of  an  unfunded  debt  is,  that  it  contributes  to  the  scarcity  of  money. 

This  distinction,  which  has  been  little  if  at  all  attended  to,  is  of  the  greatest 
moment;  it  involves  a  question  immediately  interesting  to  every  part  of  the 
community,  which  is  no  other  than  this:  whether  the  public  debt,  by  a  pro- 
vision for  it  on  true  principles,  shall  be  rendered  a  substitute  for  money; 
or  whether,  by  being  left  as  it  is,  or  by  being  provided  for  in  such  a  manner 
as  will  wound  those  principles  and  destroy  confidence,  it  shall  be  suffered  to 
continue  as  it  is,  a  pernicious  drain  of  our  cash  from  the  channels  of  produc- 
tive industry. 

The  effect  which  the  funding  of  the  public  debt,  on  right  principles,  would 
have  upon  landed  property,  is  one  of  the  circumstances  attending  such  an 
arrangement,  which  has  been  least  adverted  to,  though  it  deserves  the  most 
particular  attention.  The  present  depreciated  state  of  that  species  of  pro- 
perty is  a  serious  calamity.  The  value  of  cultivated  lands  in  most  of  the 
States,  has  fallen,  since  the  revolution,  from  twenty-five  to  fifty  per  cent. 
In  those  furthest  South,  the  decrease  is  still  more  considerable.  Indeed,  if 
the  representations  continually  received  from  that  quarter  may  be  credited, 
lands  there  will  command  no  price  which  may  not  be  deemed  an  almost 
total  sacrifice.  This  decrease  in  the  value  of  lands,  ought,  in  a  great  measure, 
to  be  attributed  to  the  scarcity  of  money ;  consequently,  whatever  produces 
an  augmentation  of  the  monied  capital  of  the  country,  must  have  a  propor- 
tional effect  in  raising  that  value.  The  beneficial  tendency  of  a  funded  debt, 
in  this  respect,  has  been  manifested  by  the  most  decisive  experience  in  Great 
Britain. 

The  proprietors  of  lands  would  not  only  feel  the  benefit  of  this  increase 
in  the  value  of  their  property,  and  of  a  more  prompt  and  better  sale,  when 
they  had  occasion  to  sell,  but  the  necessity  of  selling  would  be  itself  greatly 
diminished.  As  the  same  cause  would  contribute  to  the  facility  of  loans, 
there  is  reason  to  believe,  that  such  of  them  as  are  indebted,  would  be  able, 
through  that  resource,  to  satisfy  their  more  urgent  creditors. 

It  ought  not,  however,  to  be  expected,  that  the  advantages  described  as 
likely  to  result  from  funding  the  public  debt,  would  be  instantaneous.  It 
might  require  some  time  to  bring  the  value  of  stock  to  its  natural  level,  and 
to  attach  to  it  that  fixed  confidence,  which  is  necessary  to  its  quality  as  mo- 
ney.    Yet  the  late  rapid  rise  of  the  public  securities  encourages  an  expecta- 


1790.] 


SECRETARY  OF  THE  TREASURY. 


tion,  that  the  progress  of  stock  to  the  desirable  point,  will  be  much  more 
expeditious  than  could  have  been  foreseen.  And  as,  in  the  mean  time,  it  will 
be  increasing  in  value,  there  is  room  to  conclude  that  it  will,  from  the 
outset,  answer  many  of  the  purposes  in  contemplation.  Particularly  it  seems 
to  be  probable,  that  from  creditors  who  are  not  themselves  necessitous,  it 
will  early  meet  with  a  ready  reception  in  payment  of  debts,  at  its  current 
price. 

Having  now  taken  a  concise  view  of  the  inducements  to  a  proper  pro- 
vision for  the  public  debt,  the  next  inquiry  which  presents  itself  is,  what 
ought  to  be  the  nature  of  such  a  provision?  This  requires  some  preliminary 
discussions. 

It  is  agreed  on  all  hands,  that  that  part  of  the  debt  which  has  been  con- 
tracted abroad,  and  is  denominated  the  foreign  debt,  ought  to  be  provided 
for  according  to  the  precise  terms  of  the  contracts  relating  to  it.  The  dis- 
cussions which  can  arise,  therefore,  will  have  reference  essentially  to  the 
domestic  part  of  it — or  to  that  which  has  been  contracted  at  home.  It  is  to 
be  regretted,  that  there  is  not  the  same  unanimity  of  sentiment  on  this  part, 
as  on  the  other. 

The  Secretary  has  too  much  deference  for  the  opinions  of  every  part  of 
the  community,  not  to  have  observed  one,  which  has  more  than  once  made 
its  appearance  in  the  public  prints,  and  which  is  occasionally  to  be  met  with 
in  conversation.  It  involves  this  question,  whether  a  discrimination  ought 
not  to  be  made  between  original  holders  of  the  public  securities,  and  present 
possessors,  by  purchase?  Those  who  advocate  a  discrimination,  are  for  mak- 
ing a  full  provision  for  the  securities  of  the  former  at  their  nominal  value; 
but  contend  that  the  latter  ought  to  receive  no  more  than  the  cost  to  them, 
and  the  interest.  And  the  idea  is  sometimes  suggested  of  making  good  the 
difference  to  the  primitive  possessor.- 

In  favor  of  this  scheme,  it  is  alleged,  that  it  would  be  unreasonable  to  pay 
twenty  shillings  in  the  pound,  to  one  who  had  not  given  more  for  it  than 
three  or  four.  And  it  is  added,  that  it  would  be  hard  to  aggravate  the  mis- 
fortune of  the  first  owner,  who,  probably  through  necessity,  parted  with 
his  property  at  so  great  a  loss,  by  obliging  him  to  contribute  to  the  profit  of 
the  person  who  had  speculated  on  his  distresses. 

The  Secretary,  after  the  most  mature  reflection  on  the  force  of  this  argu- 
ment, is  induced  to  reject  the  doctrine  it  contains,  as  equally  unjust  and  im- 
politic— as  highly  injurious,  even  to  the  original  holders  of  public  securities — ■ 
as  ruinous  to  public  credit. 

It  is  inconsistent  with  justice,  because,  in  the  first  place,  it  is  a  breach  of 
contract,  a  violation  of  the  rights  of  a  fair  purchaser. 

The  nature  of  the  contract,  in  its  origin,  is,  that  the  public  will  pay  the 
sum  expressed  in  the  security,  to  the  first  holder  or  his  assignee.  The  in- 
tent in  making  the  security  assignable,  is,  that  the  proprietor  may  be  able 
to  make  use  of  his  property,  by  selling  it  for  as  much  as  it  may  be  worth  in 
the  market,  and  that  the  buyer  may  be  safe  in  the  purchase. 

Every  buyer,  therefore,  stands  exactly  in  the  place  of  the  seller,  has  the  same 
right  with  him  to  the  identical  sum  expressed  in  the  security,  and  having  ac- 
quired that  right,  by  fair  purchase,  and  in  conformity  to  the  original  agree- 
ment and  intention  of  the  government,  his  claim  cannot  be  disputed,  without 
manifest  injustice. 

That  he  is  to  be  considered  as  a  fair  purchaser,  results  from  this:  whatever 
necessity  the  seller  may  have  been  under,,  was  occasioned  by  the  government, 


REPORTS  OF  THE 


[1790. 


in  not  making  a  proper  provision  for  its  debts.  The  buyer  had  no  agency 
in  it,  and  therefore  ought  not  to  suffer.  He  is  not  even  chargeable  with 
having  taken  an  undue  advantage.  He  paid  what  the  commodity  was  worth 
in  the  market,  and.  took  the  risks  of  reimbursement  upon  himself.  He  of 
course  gave  a  fair  equivalent,  and  ought  to  reap  the  benefit  of  his  hazard;  a 
hazard  which  was  far  from  inconsiderable,  and  which,  perhaps,  turned  on 
little  less  than  a  revolution  in  government. 

That  the  case  of  those  who  parted  with  their  securities  from  necessity,  is 
a  hard  one,  cannot  be  denied.  But,  whatever  complaint  of  injury,  or  claim 
of  redress  they  may  have,  respects  the  government  solely.  They  have  not 
only  nothing  to  object  to  the  persons  who  relieved  their  necessities,  by  giv- 
ing them  the  current  price  of  their  property,  but  they  are  even  under 
an  implied  condition  to  contribute  to  the  reimbursement  of  those  per- 
sons. They  knew  that,  by  the  terms  of  the  contract  with  themselves, 
the  public  were  bound  to  pay  to  those  to  whom  they  should  convey  their 
title  the  sums  stipulated  to  be  paid  to  them;  and  that,  as  citizens  of  the  United 
States,  they  were  to  bear  their  proportion  of  the  contribution  for  that  pur- 
pose. This,  by  the  act  of  assignment,  they  tacitly  engage  to  do;  and,  if  they 
had  an  option,  they  could  not,  with  integrity  or  good  faith,  refuse  to  do  it, 
without  the  consent  of  those  to  whom  they  sold. 

But,  though  many  of  the  original  holders  sold  from  necessity,  it  does  not 
follow  that  this  was  the  case  with  all  of  them.  It  may  well  be  supposed  that 
some  of  them  did  it  either  through  want  of  confidence  in  an  eventual  provi- 
sion, or  from  the  allurements  of  some  profitable  speculation.  How  shall 
these  different  classes  be  discriminated  from  each  other?  How  shall  it  be 
ascertained,  in  any  case,  that  the  money  which  the  original  holder  obtained 
for  his  security  was  not  more  beneficial  to  him  than  if  he  had  held  it  to  the 
present  time,  to  avail  himself  of  the  provision  which  shall  be  made?  How 
shall  it  be  known  whether,  if  the  purchaser  had  employed  his  money  in 
some  other  way,  he  would  not  be  in  a  better  situation  than  by  having  applied  it 
in  the  purchase  of  securities,  though  he  should  now  receive  their  full  amount? 
And,  if  neither  of  these  things  can  be  known,  how  shall  it  be  determined 
whether  a  discrimination,  independent  of  the  breach  of  contract,  would  not 
do  a  real  injury  to  purchasers;  and,  if  it  included  a  compensation  to  the  pri- 
mitive proprietors,  would  not  give  them  an  advantage  to  which  they  had  no 
equitable  pretension? 

It  may  well  be  imagined,  also,  that  there  are  not  wanting  instances  in 
which  individuals,  urged  by  a  present  necessity,  parted  with  the  securities 
received  by  them  from  the  public, and  shortly  after  replaced  them  with  others, 
as  an  indemnity  for  their  first  loss.  Shall  they  be  deprived  of  the  indemnity 
which  they  have  endeavored  to  secure  by  so  provident  an  arrangement? 

Questions  of  this  sort,  on  a  close  inspection,  multiply  themselves  without 
end,  and  demonstrate  the  injustice  of  a  discrimination,  even  on  the  most 
subtile  calculations  of  equity,  abstracted  from  the  obligation  of  contract. 

The  difficulties,  too,  of  regulating  the  details  of  a  plan  for  that  purpose, 
which  would  have  even  the  semblance  of  equity,  would  be  found  immense. 
It  may  well  be  doubted  whether  they  would  not  be  insurmountable,  and  re- 
plete with  such  absurd  as  well  as  inequitable  consequences,  as  to  disgust 
even  the  proposers  of  the  measure. 

As  a  specimen  of  its  capricious  operation,  it  will  be  sufficient  to  notice  the 
effect  it  would  have  upon  two  persons,  who  may  be  supposed  two  years  ago 
to  have  purchased,  each,  securities  at  three  shillings  in  the  pound,  and  one  of 


1790.]  SECRETARY  OF  THE  TREASURY.  9 

them  to  retain  those  bought  by  him,  till  the  discrimination  should  take 
place,  the  other  to  have  parted  with  those  bought  by  him,  within  a  month 
past,  at  nine  shillings.  The  former,  who  had  had  most  confidence  in  the 
government,  would,  in  this  case,  only  receive  at  the  rate  of  three  shillings, 
and  the  interest;  while  the  latter,  who  had  had  less  confidence,  would  receive 
for  what  cost  him  the  same  money,  at  the  rate  of  nine  shillings,  and  his  re- 
presentative, standing  in  his  place,  would  be  entitled  to  a  like  rate. 

The  impolicy  of  a  discrimination  results  from  two  considerations:  one, 
that  it  proceeds  upon  a  principle  destructive  of  that  quality  of  the  public  debt, 
or  the  stock  of  the  nation,  which  is  essential  to  its  capacity  for  answering 
the  purposes  of  money,  that  is,  the  security  of  transfer;  the  other,  that,  as 
well  on  this  account  as  because  it  includes  a  breach  of  faith,  it  renders  pro- 
perty in  the  funds  less  valuable,  consequently  induces  lenders  to  demand  a 
higher  premium  for  what  they  lend,  and  produces  every  other  inconvenience 
of  a  bad  state  of  public  credit. 

It  will  be  perceived,  at  first  sight,  that  the  transferable  quality  of  stock  is 
essential  to  its  operation  as  money,  and  that  this  depends  on  the  idea  of  com- 
plete security  to  the  transferee,  and  a  firm  persuasion  that  no  distinction 
can,  in  any  circumstances,  be  made  between  him  and  the  original  proprietor. 

The  precedent  of  an  invasion  of  this  fundamental  principle,  would,  of 
course,  tend  to  deprive  the  community  of  an  advantage  with  which  no  tem- 
porary saving  could  bear  the  least  comparison. 

And  it  will  as  readily  be  perceived,  that  the  same  cause  would  operate  3; 
diminution  of  the  value  of  stock  in  the  hands  of  the  first  as  well  as  of  every 
other  holder.  The  price  which  any  man  who  should  incline  to  purchase, 
would  be  willing  to  give  for  it,  would  be  in  a  compound  ratio  to  the  imme- 
diate profit  it  afforded,  and  the  chance  of  the  continuance  of  his  profit.  If 
there  was  supposed  to  be  any  hazard  of  the  latter,  the  risk  would  be  taken 
into  the  calculation,  and  either  there  would  be  no  purchase  at  all,  or  it  would 
be  at  a  proportionably  less  price. 

For  this  diminution  of  the  value  of  stock,  every  person  who  should  be 
about  to  lend  to  the  government,  would  demand  compensation;  and  would 
add  to  the  actual  difference  between  the  nominal  and  the  market  value,  an 
equivalent  for  the  chance  of  greater  decrease;  which,  in  a  precarious  state 
of  public  credit,  is  always  to  be  taken  into  the  account.  Every  compensa- 
tion of  this  sort,  it  is  evident,  would  be  an  absolute  loss  to  the  government 

In  the  preceding  discussion  of  the  impolicy  of  a  discrimination,  the  inju- 
rious tendency  of  it  to  those  who  continue  to  be  the  holders  of  the  securi- 
ties they  received  from  the  government,  has  been  explained.  Nothing  need 
be  added  on  this  head,  except  that  this  is  an  additional  and  interesting  light 
in  which  the  injustice  of  the  measure  may  be  seen.  It  would  not  only  di- 
vest present  proprietors,  by  purchase,  of  the  rights  they  had  acquired  under 
the  sanction  of  public  faith,  but  it  would  depreciate  the  property  of  the  re- 
maining original  holders.  It  is  equally  unnecessary  to  add  any  thing  to  what 
has  been  already  said,  to  demonstrate  the  fatal  influence  which  the  principle 
of  discrimination  would  have  on  the  public  credit. 

But  there  is  still  a  point  in  view  in  which  it  will  appear  perhaps  even 
more  exceptionable  than  in  either  of  the  former.  It  would  be  repugnant 
to  an  express  provision  of  the  Constitution  of  the  United  States.  This  pro- 
vision is,  that  "all  debts  contracted,  and  engagements  entered  into,  before 
the  adoption  of  that  Constitution,  shall  be  as  valid  against  the  United  States 
under  it,  as  under  the  Confederation;"  which  amounts  to  a  constitutional  rati- 


20  REPORTS  OF  THE  [1790, 

fication  of  the  contracts  respecting  the  debt  in  the  state  in  which  they  existed 
under  the  Confederation.  And,  resorting  to  that  standard,  there  can  be  no 
doubt  that  the  rights  of  assignees  and  original  holders  must  be  considered 
as  equal.  In  exploding  thus  fully  the  principle  of  discrimination,  the  Se- 
cretary is  happy  in  reflecting,  that  he  is  only  the  advocate  of  what  has  been 
already  sanctioned  by  the  formal  and  express  authority  of  the  government  of 
the  Union,  in  these  emphatic  terms:  u  The  remaining  class  of  creditors,"  say 
Congress,  in  their  circular  address  to  the  States,  of  the  26th  of  April,  1783,  "is 
"  composed  partly  of  such  of  our  fellow  citizens  as  originally  lent  to  the 
"public  the  use  of  their  funds,  or  have  since  manifested  most  confidence  in 
"  their  country,  by  receiving  transfers  from  the  lenders;  and  partly  of  those 
"whose  property  has  been  either  advanced  or  assumed  for  the  public  service* 
61  To  discriminate  the  merits  of  these  several  descriptions  of  creditors  would 
"  be  a  task  equally  unnecessary  and  invidious.  If  the  voice  of  humanity 
"plead  more  loudly  in  favor  of  some  than  of  others,  the  voice  of  policy,  no 
'*'  less  than  of  justice,  pleads  in  favor  of  all.  A  wise  nation  will  never  per- 
"  mit  those  who  relieve  the  wants  of  their  country,  or  who  rely  most  on 
"  its  faith,  its  firmness,  and  its  resources,  when  either  of  them  is  distrusted, 
"  to  suffer  by  the  event." 

The  Secretary,  concluding  that  a  discrimination  between  the  different 
classes  of  creditors  of  the  United  States  cannot,  with  propriety,  be  made, 
proceeds  to  examine  whether  a  difference  ought  to  be  permitted  to  remain 
between  them  and  another  description  of  public  creditors — those  of  the 
States,  individually.  The  Secretary,  after  mature  reflection  on  this  point,  en- 
tertains a  full  conviction,  that  an  assumption  of  the  debts  of  the  particular 
States  by  the  Union,  and  a  like  provision  for  them  as  for  those  of  the  Union, 
will  be  a  measure  of  sound  policy  and  substantial  justice. 

It  would,  in  the  opinion  of  the  Secretary,  contribute,  in  an  eminent  de- 
gree, to  an  orderly,  stable,  and  satisfactory  arrangement  of  the  national 
finances.  Admitting,  as  ought  to  be  the  case,  that  a  provision  must  be  made, 
in  some  way  or  other,  for  the  entire  debt,  it  will  follow  that  no  greater  reve- 
nues will  be  required,  whether  that  provision  be  made  wholly  by  the  United 
States,  or  partly  by  them,  and  partly  by  the  States  separately. 

The  principal  question,  then,  must  be,  whether  such  a  provision  cannot  be 
more  conveniently  and  effectually  made,  by  one  general  plan,  issuing  from 
one  authority,  than  by  different  plans,  originating  in  different  authorities? 
In  the  first  case  there  can  be  no  competition  for  resources;  in  the  last,  there 
must  be  such  a  competition.  The  consequences  of  this,  without  the  greatest 
caution  on  both  sides,  might  be  interfering  regulations,  and  thence  collision 
and  confusion.  Particular  branches  of  industry  might  also  be  oppressed  by 
it.  The  most  productive  objects  of  revenue  are  not  numerous.  Either  these 
must  be  wholly  engrossed  by  one  side,  which  might  lessen  the  efficacy  of 
the  provisions  by  the  other,  or  both  must  have  recourse  to  the  same  objects, 
in  different  modes,  which  n:ight  occasion  an  accumulation  upon  them  beyond 
what  they  could  properly  bear.  If  this  should  not  happen,  the  caution  re- 
quisite to  avoiding  it  would  prevent  the  revenue's  deriving  the  full  benefit 
of  each  object.  The  danger  of  interference  and  of  excess,  would  be  apt  to 
impose  restraints  very  unfriendly  to  the  complete  command  of  those  re- 
sources which  are  the  most  convenient,  and  to  compel  the  having  recourse 
to  others  less  eligible  in  themselves,  and  less  agreeable  to  the  community. 
The  difficulty  of  an  effectual  command  of  the  public  resources,  in  case  of 
separate  provisions  for  the  debt,  may  be  seen  in  another,  and,  perhaps,  more 
striking  light     It  would  naturally  happen  that  different  States,  from  local 


179U.]  SECRETARY  OF  THE  TREASURY.  n 

considerations,  would,  in  some  instances,  have  recourse  to  different  objects, 
in  others  to  the  same  objects,  in  different  degrees,  for  procuring  the  funds 
of  which  they  stood  in  need.  It  is  easy  to  conceive  how  this  diversity 
would  affect  the  aggregate  revenue  of  the  country.  By  the  supposition,  ar- 
ticles which  yielded  a  full  supply  in  some  States,  would  yield  nothing,  or  an 
insufficient  product,  in  others.  And  hence  the  public  revenue  would  not 
derive  the  full  benefit  of  those  articles  from  State  regulations:  neither  could 
the  deficiencies  be  made  good  by  those  of  the  Union.  It  is  a  provision  of 
the  national  Constitution,  that  "  all  duties,  imposts,  and  excises,  shall  be 
"  uniform  throughout  the  United  States."  And,  as  the  general  govern- 
ment would  be  under  a  necessity,  from  motives  of  policy,  of  paying  regard 
to  the  duty  which  may  have  been  previously  imposed  upon  any  article, 
though  but  in  a  single  State,  it  would  be  constrained  either  to  refrain  wholly 
from  any  further  imposition  upon  such  article,  where  it  had  been  already 
rated  as  high  as  was  proper,  or  to  confine  itself  to  the  difference  between  the 
existing  rate  and  what  the  article  would  reasonably  bear.  Thus  the  pre- 
occupancy  of  an  article  by  a  single  State,  would  tend  to  arrest  or  abridge 
the  impositions  of  the  Union  on  that  article.  And  as  it  is  supposable,  that 
a  great  variety  of  articles  might  be  placed  in  this  situation,  by  dissimilar  ar- 
rangements of  the  particular  States,  it  is  evident  that  the  aggregate  revenue 
of  the  country  would  be  likely  to  be  very  materially  contracted  by  the  plan 
of  separate  provisions. 

If  all  the  public  creditors  receive  their  dues  from  one  source,  distributed 
with  an  equal  hand,  their  interest  will  be  the  same.  And,  having  the  same 
interests,  they  will  unite  in  the  support  of  the  fiscal  arrangements  of  the 
government:  as  these,  too,  can  be  made  with  more  convenience  where 
there  is  no  competition.  These  circumstances  combined,  will  ensure  to  the 
revenue  laws  a  more  ready  and  more  satisfactory  execution. 

If,  on  the  contrary,  there  are  distinct  provisions,  there  will  be  distinct 
interests,  drawing  different  ways.  That,  union  and  concert  of  views,  among 
the  creditors,  which  in  every  government  is  of  great  importance  to  their 
security,  and  to  that  of  public  credit,  will  not  only  not  exist,  but  will  be 
likely  to  give  place  to  mutual  jealousy  and  opposition.  And  from  this  cause,, 
the  operation  of  the  systems  which  may  be  adopted  both  by  the  particular 
States  and  by  the  Union,  with  relation  to  their  respective  debts,  will  be  in 
danger  of  being  counteracted. 

There  are  several  reasons,  which  render  it  probable  that  the  situation  of 
the  State  creditors  would  be  worse  than  that  of.  the  creditors  of  the  Union, 
if  there  be  not  a  national  assumption  of  the  State  debts.  Of  these  it  will  be 
sufficient  to  mention  two:  one,  that  a  principal  branch  of  revenue  is  exclu- 
sively vested  in  the  Union;  the  other,  that  a  State  must  always  be  checked 
in  the  imposition  of  taxes  on  articles  of  consumption,  from  the  want  of  power 
to  extend  the  same  regulation  to  the  other  States,  and  from  the  tendency  of 
partial  duties  to  injure  its  industry  and  commerce.  Should  the  State  creditors 
stand  upon  a  less  eligible  footing  than  the  others,  it  is  unnatural  to  expect 
they  would  see  with  pleasure  a  provision  for  them.  The  influence  which 
their  dissatisfaction  might  have,  could  not  but  operate  injuriously,  both  for 
the  creditors  and  the  credit  of  the  United  States.  Hence  it  is  even  the 
interest  of  the  creditors  of  the  Union,  that  those  of  the  individual  States 
should  be  comprehended  in  a  general  provision.  Any  attempt  to  secure  to 
the  former  either  exclusive  or  peculiar  advantages,  would  materially  hazard 
their  interests.  Neither  would  it  be  just,  that  one  class  of  the  public  creditors 
should  be  more  favored  than  the  other,  The  objects  for  which  both  descrip- 


12  REPORTS  OF  THE  [179(js 

tions  of  the  debt  were  contracted,  are  in  the  main  the  same.  Indeed  a  great 
part  of  the  particular  debts  of  the  States  has  arisen  from  assumptions  by  them 
on  account  of  the  Union.  And  it  is  most  equitable,  that  there  should  be  the 
same  measure  of  retribution  for  all.  There  is  an  objection,  however,  to  an 
assumption  of  the  State  debts,  which  deserves  particular  notice.  It  may  be 
supposed,  that  it  would  increase  the  difficulty  of  an  equitable  settlement  be- 
tween them  and  the  United  States. 

The  principles  of  that  settlement,  whenever  they  shall  be  discussed,  will 
require  all  the  moderation  and  wisdom  of  the  government.  In  the  opinion 
of  the  Secretary,  that  discussion,  till  further  lights  are  obtained,  would  be 
premature.  All,  therefore,  which  he  would  now  think  adviseable  on  the 
point  in  question,  would  be,  that  the  amount  of  the  debts  assumed  and  pro- 
vided for,  should  be  charged  to  the  respective  States,  to  abide  an  eventual 
arrangement.  ~~This,  the  United  States,  as  assignees  to  the  creditors,  would 
have  an  indisputable  right  to  do.  But  as  it  might  be  a  satisfaction  to  the 
House  to  have  before  them  some  plan  for  the  liquidation  of  accounts  between 
the  Union  and  its  members,  which,  including  the  assumption  of  the  State 
debts,  would  consist  with  equity,  the  Secretary  will  submit,  in  this  place, 
such  thoughts  on  the  subject  as  have  occurred  to  his  own  mind,  or  been  sug- 
gested to  him,  most  compatible,  in  his  judgment,  with  the  end  proposed. 

Let  each  State  be  charged  with  all  the  money  advanced  to  it  out  of  the 
treasury  of  the  United  States,  liquidated  according  to  the  specie  value  at 
the  time  of  each  advance,  with  interest  at  six  per  cent. 

Let  it  also  be  charged  with  the  amount,  in  specie  value,  of  all  its  securities 
which  shall  be  assumed,  with  the  interest  upon  them,  to  the  time  when  inte- 
rest shall  become  payable  by  the  United  States. 

Let  it  be  credited  for  all  moneys  paid,  and  articles  furnished  to  the  United 
States,  and  for  all  other  expenditures  during  the  war,  either  towards  general 
or  particular  defence,  whether  authorized  or  unauthorized  by  the  United 
States;  the  whole  liquidated  to  specie  value,  and  bearing  an  interest  of  six 
per  cent.,  from  the  several  times  at  which  the  several  payments,  advances, 
and  expenditures  accrued. 

And  let  all  sums  of  continental  money  now  in  the  treasuries  of  the  re- 
spective States,  which  shall  be  paid  into  the  treasury  of  the  United  States,  be 
credited  at  specie  value. 

Upon  a  statement  of  the  accounts  according  to  these  principles,  there  can 
be  little  doubt  that  balances  would  appear  in  favor  of  all  the  States  against 
the  United  States. 

To  equalize  the  contributions  of  the  States,  let  each  be  then  charged  with 
its  proportion  of  the  aggregate  of  those  balances,  according  to  some  equitable 
ratio,  to  be  devised  for  that  purpose. 

If  the  contributions  should  be  found  disproportionate,  the  result  of  this 
adjustment  would  be,  that  some  States  would  be  creditors,  some  debtors,  to 
the  Union.  Should  this  be  the  case — as  it  will  be  attended  with  less  incon- 
venience to  the  United  States  to  have  to  pay  balances  to,  than  to  receive 
them  from,  the  particular  States — it  may,  perhaps,  be  practicable  to  effect 
the  former  by  a  second  process,  in  the  nature  of  a  transfer  of  the  amount  of 
the  debts  of  debtor  States,  to  the  credit  of  creditor  States;  observing  the  ratio 
by  which  the  first  apportionment  shall  have  been  made.  This,  whilst  it 
would  destroy  the  balances  due  from  the  former,  would  increase  those  due 
to  the  latter.  These  to  be  provided  for  by  the  United  States,  at  a  reasonable 
interest,  but  not  to  be  transferable.  The  expediency  of  this  second  process 
must  depend  on  a  knowledge  of  the  result  of  the  first.     If  the  inequalities 


1790.1  SECRETARY  OF  THE  TREASURY.  |3 

should  be  too  great,  the  arrangement  may  be  impracticable,  without  unduly 
increasing  the  debt  of  the  United  States.  But  it  is  not  likely  that  this  would 
be  the  case.  It  is  also  to  be  remarked,  that  though  this  second  process  might 
not,  upon  the  principle  of  apportionment,  bring  the  thing  to  the  point  aimed 
at,  yet  it  may  approach  so  nearly  to  it,  as  to  avoid  essentially  the  embarrass- 
ment of  having  considerable,balances  to  collect  from  any  of  the  States. 

The  whole  of  this  arrangement  to  be  under  the  superintendence  of 
commissioners,  vested  with  equitable  discretion  and  final  authority.  The 
operation  of  the  plan  is  exemplified  in  schedule  A. 

The  general  principle  of  it  seems  to  be  equitable,  for  it  appears  difficult 
to  conceive  a  good  reason  why  the  expenses  for  the  particular  defence  of  a 
part,  in  a  common  war,  should  not  be  a  common  charge,  as  well  as  those 
incurred  professedly  for  the  general  defence.  The  defence  of  each  part  is 
that  of  the  whole;  and  unless  all  the  expenditures  are  brought  into  a  com- 
mon mass,  the  tendency  must  be  to  add  to  the  calamities  suffered,  by  being 
the  most  exposed  to  the  ravages  of  war,  an  increase  of  burthens.  This  plan 
seems  to  be  susceptible  of  no  objection  which  does  not  belong  to  every  other, 
that  proceeds  on  the  idea  of  a  final  adjustment  of  accounts.  The  difficulty 
of  settling  a  ratio  is  common  to  all.  This  must,  probably,  either  be  sought 
for  in  the  proportions  of  the  requisitions  during  the  war,'  or  in  the  decision 
of  commissioners,  appointed  with  plenary  power.  The  rule  prescribed  in 
the  Constitution  with  regard  to  representation  and  direct  taxes,  would  evi- 
dently not  be  applicable  to  the  situation  of  parties,  during  the  period  in 
question.  The  existing  debt  of  the  United  States  is  excluded  from  the  com- 
putation, as  it  ought  to  be,  because  it  will  be  provided  for  out  of  a  genera! 
fund.  The  only  discussion  of  a  preliminary  kind  which  remains,  relates 
to  the  distinctions  of  the  debt  into  principal  and  interest.  It  is  well  known 
that  the  arrears  of  the  latter  bear  a  large  proportion  to  the  amount  of  the 
former.  The  immediate  payment  of  these  arrears  is  evidently  impracticable: 
and  a  question  arises — what  ought  to  be  done  with  them? 

There  is  good  reason  to  conclude,  that  the  impressions  of  many  are  more 
favorable  to  the  claim  of  the  principal,  than  to  that  of  the  interest;  at  least  so 
far  as  to  produce  an  opinion,  that  an  inferior  provision  might  suffice  for  the 
latter. 

But,  to  the  Secretary,  this  opinion  does  not  appear  to  be  well  founded.  His 
investigations  of  the  subject  have  led  him  to  a  conclusion^  that  the  arrears 
of  interest  have  pretensions  at  least  equal  to  the  principal. 

The  liquidated  debt,  traced  to  its  origin,  falls  under  two  principal  dis- 
criminations. One  relating  to  loans,  the  other  to  services  performed  and 
articles  supplied.  The  part  arising  from  loans  was  at  first  made  payable  at 
fixed  periods,  which  have  long  since  elapsed,  with  an  early  option  to  lenders, 
either  to  receive  back  their  money  at  the  expiration  of  those  periods,  or  to 
continue  it  at  interest,  till  the  whole  amount  of  continental  bills  circulating 
should  not  exceed  the  sum  in  circulation  at  the  time  of  each  loan.  This  con- 
tingency, in  the  sense  of  the  contract,  never  happened;  and  the  presumption 
is,  that  the  creditors  preferred  continuing  their  money  indefinitely  at  in- 
terest, to  receiving  it  in  a  depreciated  and  depreciating  state. 

The  other  parts  of  it  were  chiefly  for  objects  which  ought  to  have  been 
paid  for  at  the  time,  that  is,  when  the  services  were  performed,  or  the  sup- 
plies furnished;  and  were  not  accompanied  with  any  contract  for  interest. 

But  by  different  acts  of  government  and  administration,  concurred  in  by 
the  creditors,  these  parts  of  the  debt  have  been  converted  into  a  capital, 
bearing  an  interest  of  six  per  cent,  per  annum,  but  without  anv  definite 


|4  '  REPORTS  OF  THE  [1790, 

period  of  redemption.  A  portion  of  the  Loan  Office  debt,  has  been  ex- 
changed for  new  securities  of  that  import;  and  the  whole  of  it  seems  to 
have  acquired  that  character  after  the  expiration  of  the  periods  prefixed  for 
re-payment.  If  this  view  of  the  subject  be  a  just  one,  the  capital  of  the  debt 
of  the  United  States  may  be  considered  in  the  light  of 'an  annuity  at  the  rate 
of  six  per  cent,  per  annum,  redeemable  at  the  pleasure  of  the  govern- 
ment, by  payment  of  the  principal.  For  it  seems  to  be  a  clear  position,  that 
when  a  government  contracts  a  debt  payable  with  interest,  without  any  pre- 
cise time  being  stipulated  or  understood  for  payment  of  the  capital,  that  time 
is  a  matter  of  pure  discretion  with  the  government,  which  is  at  liberty  to 
consult  its  own  convenience  respecting  it,  taking  care  to  pay  the  interest 
with  punctuality. 

Wherefore,  as  long  as  the  United  States  should  pay  the  interest  of  their  debt, 
as  it  accrued,  jtheir  creditors  would  have  no  right  to  demand  the  principal. 
But  with  regard  to  the  arrears  of  interest,  the  case  is  different.  These  are 
now  due,  and  those  to  whom  they  are  due,  have  a  right  to  claim  immediate 
payment.  To  say  that  it  would  be  impracticable  to  comply,  would  not  vary 
the  nature  of  the  right.  Nor  can  this  idea  of  impracticability  be  honora- 
bly carried  further  than  to  justify  the  proposition  of  a  new  contract,  upon 
the  basis  of  a  commutation  of  that  right  for  an  equivalent.  This  equivalent 
too  ought  to  be  a  real  and  fair  one.  And  what  other  fair  equivalent  can  be 
imagined  for  the  detention  of  money,  but  a  reasonable  interest?  Or  what  can 
be  the  standard  of  that  interest,  but  the  market  rate,  or  the  rate  which  the 
government  pays  in  ordinary  cases? 

From  this  view  of  the  matter,  which  appears  to  be  the  accurate  and  true 
one,  it  will  follow,  that,  the  arrears  of  interest  are  entitled  to  an  equal  pro- 
vision with  the  principal  of  the  debt. 

The  result  of  the  foregoing  discussions  is  this.  That  there  ought  to  be  no 
discrimination  between  the  original  holders  of  the  debt,  and  present  pos- 
sessors by  purchase.  That  it  is  expedient  there  should  be  an  assumption 
of  the  State  debts  by  the  Union,  and  that  the  arrears  of  interest  should  be 
provided  for  on  an  equal  footing  with  the  principal. 

The  next  inquiry,  in  order,  towards  determining  the  nature  of  a  proper 
provision,  respects  the  quantum  of  the  debt,  and  the  present  rates  of  interest. 

The  debt  of  the  Union  is  distinguishable  into  foreign  and  domestic. 
The  Foreign  Debt,  as  stated  in  schedule  B,  amounts  to 

principal     -  -  -  -  -  -  $10,070,307  00 

Bearing  an  interest  of  four,  and  partly  an  interest,  of 

five  per  cent. 
Arrears  of  interest  to  the  last  of  December,  1789       -  1,640,071  62 


Making  together         -  -  -  $11,710,378  62 

The  Domestic  Debt  may  be  subdivided  into  liquidated 

and  unliquidated;  principal  and  interest. 
The  principal  of  the  liquidated  part,   as  stated  in  the 

schedule  C,  amounts  to        -    .         -  -  -         $27,383,917  74 

Bearing  an  interest  of  six  per  cent. 
The  arrears  of  interest,  as  stated  in  the  schedule  D,  to 

the  end  of  1790,  amount  to  -  13,030,168  20 


Making  together  -  .  -         $40,414,085  94 


90.] 


SECRETARY  OF  THE  TREASURY.  iLii 


This  includes  all  that  has  been  paid  in  indents  (except  what  has  come  into 
the  treasury  of  the  United  States,)  which,  in  the  opinion  of  the  Secretary, 
can  be  considered  in  no  other  light  than  as  interest  due. 

The  unliquidated  part  of  the  domestic  debt,  which  consists  chiefly  of 
the  continental  bills  of  credit,  is  not  ascertained,  but  may  be  estimated  at 
2,000,000  dollars. 

These  several  sums  constitute  the  whole  of  the  debt  of  the  United  States, 
amounting  together  to  $  54,124,464  56.  That  of  the  individual  States  is  not 
equally  well  ascertained.  The  schedule  E  shows  the  extent  to  which  it 
has  been  ascertained  by  returns  pursuant  to  the  order  of  the  House  of  the  21st 
September  last,  but  this  not  comprehending  all  the  States,  the  residue  must 
he  estimated  from  less  authentic  information.  The  Secretary,  however, 
presumes,  that  the  total  amount  may  be  safely  stated  at  25  millions  of  dollars, 
principal  and  interest.  The  present  rate  of  interest  of  the  State  debts  is, 
in  general,  the  same  with  that  of  the  domestic  debt  of  the  Union. 

On  the  supposition  that  the  arrears  of  interest  ought  to  be  provided  for, 
on  the  same  terms  with  the  principal,  the  annual  amount  of  the  interest, 
which,  at  the  existing  rates,  would  be  payable,  on  the  entire  mass  of  the 
public  debt,  would  be — 

On  the  foreign  debt,  computing  the  interest  on  the  principal,  as  it  stands, 
and  allowing  four  per  cent,  on  the  arrears  of  interest,  $542,599  6*6 

On  the  domestic  debt,  including  that  of  the  States,  4,044,845  15 


Making  together,  $4,587,444  SI 

The  interesting  problem  now  occurs.  Is  it  in  the  power  of  the  United 
States,  consistently  with  those  prudential  considerations  which  ought  not  to 
be  overlooked,  to  make  a  provision  equal  to  the  purpose  of  funding  the 
whole  debt,  at  the  rates  of  interest  which  it  now  bears,  in  addition  to  the  sum 
which  will  be  necessary  for  the  current  service  of  the  government? 

The  Secretary  will  not  say  that  such  a  provision  would  exceed  the  abilities 
of  the  country;  but  he  is  clearly  of  opinion,  that  to  make  it,  would  require 
the  extension  of  taxation  to  a  degree,  and  to  objects,  which  the  true  interest 
of  the  public  creditors  forbids.  It  is  therefore  to  be  hoped,  and  even  to  be  ex- 
pected, that  they  will  cheerfully  concur  in  such  modifications  of  their  claims, 
on  fair  and  equitable  principles,  as  will  facilitate  to  the  government  an  arrange- 
ment substantial,  durable,  and  satisfactory  to  the  community.  The  import- 
ance of  the  last  characteristic  will  strike  every  discerning  mind.  No  plan, 
however  flattering  in  appearance,  to  which  it  did  not  belong,  could  be  trulv 
entitled  to  confidence. 

It  will  not  be  forgotten,  that  exigencies  may,  ere  long,  arise,  which  would 
call  for  resources  greatly  beyond  what  is  now  deemed  sufficient  for  the  cur- 
rent service;  and  that,  should  the  faculties  of  the  country  be  exhausted,  or 
even  strained,  to  provide  for  the  public  debt,  there  could  be  less  reliance  on 
the  sacredness  of  the  provision.  But  while  the  Secretary  yields  to  the  force 
of  these  considerations,  he  does  not  lose  sight  of  those  fundamental  principles 
of  good  faith,  which  dictate  that  every  practicable  exertion  ought  to  be 
made,  scrupulously  to  fulfil  the  engagements  of  the  government;  that  no 
change  in  the  rights  of  its  creditors  ought  to  be  attempted  without  their 
voluntary  consent;  and  that  this  consent  ought  to  be  voluntary  in  fact,  as 
well  as  in  name.  Consequently,  that  every  proposal  of  a  change  ought  to 
be  in  the  shape  of  an  appeal  to  their  reason  and  to  their  interest;  not  to 


jfc  REPORTS  OF  THE  1790.] 

their  necessities.  To  this  end  it  is  requisite,  that  a  fair  equivalent  should 
be  offered  for  what  may  be  asked  to  be  given  up,  and  unquestionable  securi- 
ty for  the  remainder.  Without  this,  an  alteration  consistently  with  the 
credit  and  honor  of  the  nation  would  be  impracticable. 

It  remains  to  see  what  can  be  proposed  in  conformity  to  these  views. 
It  has  been  remarked,  that  the  capital  of  the  debt  of  the  Union  is  to  be 
viewed  in  the  light  of  an  annuity  at  the  rate  of  six  per  cent,  per  annum,  re- 
deemable at  the  pleasure  of  the  government,  by  payment  of  the  principal. 
And  it  will  not  be  required  that  the  arrears  of  interest  should  be  considered 
in  a  more  favorable  light.  The  same  character,  in  general,  may  be  applied 
to  the  debts  of  the  individual  States. 

This  view  of  the  subject  admits,  that  the  United  States  would  have  it  in 
their  power  to  avail  themselves  of  any  fall  in  the  market  rate  of  interest 
for  reducing  thaT  of  the  debt. 

This  property  of  the  debt  is  favorable  to  the  public;  unfavorable  to  the 
creditor;  and  may  facilitate  an  arrangement  for  the  reduction  of  interest, 
upon  the  basis  of  a  fair  equivalent. 

Probabilities  are  always  a  rational  ground  of  contract.  The  Secretary 
conceives,  that  there  is  good  reason  to  believe,  if  effectual  measures  are 
taken  to  establish  public  credit,  that  the  government  rate  of  interest  in  the 
United  States,  will,  in  a  very  short  time,  fall  at  least  as  low  as  five  per  cent,, 
and  that  in  a  period,  not  exceeding  twenty-years,  it  will  sink  still  lower, 
probably  to  four.  There  are  two  principal  causes  which  will  be  likely  to 
produce  this  effect;  one,  the  low  rate  of  interest  in  Europe;  the  other,  the 
increase  of  the  monied  capital  of  the  nation,  by  the  funding  of  the  public 
debt. 

From  three  to  four  per  cent,  is  deemed  good  interest  in  several  parts  of 
Europe.  Even  less  is  deemed  so,  in  some  places; — and  it  is  on  the  de- 
cline;— the  increasing  plenty  of  money  continually  tending  to  lower  it.  It 
is  presumable,  that  no  country  will  be  able  to  borrow  of  foreigners  upon 
better  terms  than  the  United  States,  because  none  can,  perhaps,  afford  so 
good  security.  Our  situation  exposes  us  less  than  that  of  any  other  nation, 
to  those  casualties  which  are  the  chief  causes  of  expense;  our  incumbrances, 
in  proportion  to  our  real  means,  are  less,  though  these  cannot  immediately 
be  brought  so  readily  into  action;  and  our  progress  in  resources  from  the 
early  state  of  the  country,  and  the  immense  tracts  of  unsettled  territory, 
must  necessarily  exceed  that  of  any  other.  The  advantages  of  this  situa- 
tion have  already  ■  engaged  the  attention  of  the  European  money  lenders, 
particularly  among  the  Dutch.  And  as  they  become  better  understood, 
ihey  will  have  the  greater  influence.  Hence,  as  large  a  proportion  of  the 
cash  of  Europe  as  may  be  wanted,  will  be,  in  a  certain  sense,  in  our  market 
for  the  use  of  government.  And  this  will  naturally  have  the  effect  of  a 
reduction  of  the  rate  of  interest,  not  indeed  to  the  level  of  the  places  which 
send  their  money  to  market,  but  to  something  much  nearer  to  it  than  our 
present  rate. 

The  influence  which  the  funding  of  the  debt  is  calculated  to  have  in  low- 
ering interest,  has  been  already  remarked  and  explained.  It  is  hardly  pos- 
sible that  it  should  not  be  materially  affected  by  such  an  increase  of  the  mo- 
nied capital  of  the  nation,  as  would  result  from  the  proper  funding  of  seven- 
ty millions  of  dollars.  But  the  probability  of  a  decrease  in  the  rate  of  in- 
terest, acquires  confirmation  from  facts  which  existed  prior  to  the  revolu- 
tion.    It  is  well  known  that,  in  some  of  the  States,  money  might,  with  fa- 


790.] 


SECRETARY  OF  THE  TREASURY, 


cility,  be  borrowed,  on  good  security,  at  five  per  cent.,  and  not  unfrequent- 
ly,  even  at  less. 

The  most  enlightened  of  the  public  creditors  will  be  most  sensible  of  the 
justness  of  this  view  of  the  subject,  and  of  the  propriety  of  the  use  which 
will  be  made  of  it.  The  Secretary,  in  pursuance  of  it,  will  assume,  as  a 
probability  sufficiently  great  to  be  a  ground  of  calculation,  both  on  the  part 
of  the  government  and  of  its  creditors — that  the  interest  of  money  in  the 
United  States  will,  in  five  years,  fall  to  five  per  cent,  and  in  twenty,  to  four. 
The  probability,  in  the  mind  of  the  Secretary,  is  rather  that  the  fall  may 
be  more  rapid  and  more  considerable;  but  he  prefers  a  mean,  as  most  like- 
ly to  engage  the  assent  of  the  creditors,  and  more  equitable  in  itself ;  because 
it  is  predicated  on  probabilities,  which  may  err  on  one  side,  as  well  as  on 
the  other. 

Premising  these  things,  the  Secretary  submits  to  the  House  the  expediency 
of  proposing  a  loan,  to  the  full  amount  of  the  debt,  as  well  of  the  particular 
States  as  of  the  Union,  upon  the  following  terms: 

First.  That,  for  every  hundred  dollars  subscribed,  payable  in  the  debts 
(as  well  interest  as  principal,)  the  subscriber  be  entitled,  at  his  option,  either 
to  have  two-thirds  funded  at  an  annuity  or  yearly  interest  of  six  per  cent, 
redeemable  at  the  pleasure  of  the  government,  by  payment  of  the  principal., 
and  to  receive  the  other  third  in  lands  in  the  western  territory,  at  the  rate 
of  twenty  cents  per  acre.  Or,  to  have  the  whole  sum  funded  at  an  an- 
nuity or  yearly  interest  of  four  per  cent,  irredeemable  by  any  payment  ex- 
ceeding five  dollars  per  annum,  on  account  both  of  principal  and  interest, 
and  to  receive,  as  a  compensation  for  the  reduction  of  interest,  fifteen  dollars 
and  eighty  cents,  payable  in  lands,  as  in  the  preceding  case.  Or,  to  have 
sixty-six  dollars  and  two-thirds  of  a  dollar  funded  immediately,  at  an  annuity 
or  yearly  interest  of  six  per  cent,  irredeemable  by  any  payment  exceeding 
four  dollars  and  two-thirds  of  a  dollar  per  annum,  oh  account  both  of  princi^ 
pal  and  interest;  and  to  have,  at  the  end  of  ten  years,  twenty-six  dollars  and, 
eighty-eight  cents,  funded  at  the  like  interest  and  rate  of  redemption.  Or, 
to  have  an  annuity  for  the  remainder  of  life,  upon  the  contingency  of  living 
to  a  given  age,  not  less  distant  than  ten  years,  computing  interest  at  four  per 
cent.  Or,  to  have  an  annuity  for  the  remainder  of  life,  upon  the  contingency 
of  the  survivorship  of  the  youngest  of  two  persons,  computing  interest  in  this 
case  also  at  four  per  cent. 

In  addition  to  the  foregoing  loan,  payable  wholly  in  the  debt,  the  Secre- 
tary would  propose  that  one  should  be  opened  for  ten  millions  of  dollars,  on 
the  following  plan: 

That,  for  every  hundred  dollars  subscribed,  payable  one  half  in  specie,  and 
the  other  half  in  debt,  (as  well  principal  as  interest,)  the  subscriber  be  en- 
titled to  an  annuity  or  yearly  interest  of  five  per  cent,  irredeemable  by  any 
payment  exceeding  six  dollars  per  annum,  on  account  both  of  principal  and 
interest. 

The  principles  and  operation  of  these  different  plans  may  now  require  ex- 
planation. 

The  first  is  simply  a  proposition  for  paying  one-third  of  the  debt  in  land, 
and  funding  the  other  two-thirds  at  the  existing  rate  of  interest,  and  upon 
the  same  terms  of  redemption  to  which  it  is  at  present  subject. 

Here  is  no  conjecture,  no  calculation  of  probabilities.  The  creditor  is 
offered  the  advantage  of  making  his  interest  principal,  and  he  is  asked  to  fa- 


REPORTS  OF  THE 


[1790, 


cilitate  to  the  government  an  effectual  provision  for  his  demands,  by  accept- 
ing a  third  part  of  them  in  land,  at  a  fair  valuation. 

The  general  price  at  which  the  western  lands  have  been  heretofore  sold, 
has  been  a  dollar  per  acre  in  public  securities;  but,  at  the  time  the  principal 
purchases  were  made,  these  securities  were  worth  in  the  market  less  than 
three  shillings  in  the  pound.  The  nominal  price,  therefore,  would  not  be 
the  proper  standard,  under  present  circumstances,  nor  would  the  precise 
specie  value  then  given  be  a  just  rule:  because,  as  the  payments  were  to  be 
made  by  instalments,  and  the  securities  were,  at  the  times  of  the  purchases, 
extremely  low,  the  probability  of  a  moderate  rise  must  be  presumed  to  have 
been  taken  into  the  account. 

Twenty  cents,  therefore,  seems  to  bear  an  equitable  proportion  to  the  two 
considerations  of  value  at  the  time  and  likelihood  of  increase. 

It  will  be  understood  that,  upon  this  plan,  the  public  retains  the  advan- 
tage of  availing  itself  of  any  fall  in  the  market  rate  of  interest,  for  reducing 
that  upon  the  debt;  which  is  perfectly  just,  as  no  present  sacrifice,  either  in 
the  quantum  of  the  principal,  or  in  the  rate  of  interest,  is  required  from  the 
creditor. 

The  inducement  to  the  measure  is,  the  payment  of -one-third  of  the  debt  in 
land.  The  second  plan  is  grounded  upon  the  supposition  that  interest,  in 
five  years,  will  fall  to  five  per  cent. ,  in  fifteen  more  to  four.  As  the  capital 
remains  entire,  but  bearing  an  interest  of  four  per  cent,  only,  compensation 
is  to  be  made  to  the  creditor  for  the  interest  of  two  per  cent,  per  annum,  for 
five  years,  and  of  one  per  cent,  per  annum,  for  fifteen  years,  to  commence  at 
the  distance  of  five  years.  The  present  value  of  these  two  sums  or  annuities, 
computed  according  to  the  terms  of  the  supposition,  is,  by  strict  calculation, 
fifteen  dollars  and  seven  hundred  and  ninety-two  thousandth  parts  of  a  dollar; 
a  fraction  less  than  the  sum  proposed. 

The  inducement  to  the  measure  here,  is  the  reduction  of  interest  to  a  rate 
more  within  the  compass  of  a  convenient  provision,  and  the  payment  of  the 
compensation  in  lands. 

The  inducements  to  the  individual,  are — the  accommodation  afforded  to  the 
public — the  high  probability  of  a  complete  equivalent — the  chance  even  of 
gain,  should  the  rate  of  interest  fall,  either  more  speedily,  or  in  a  greater 
degree,  than  the  calculation  supposes.  Should  it  fall  to  five  per  cent,  sooner 
than  five  years;  should  it  fall  lower  than  five  before  the  additional  fifteen 
were  expired;  or  should  it  fall  below  four,  previous  to  the  payment  of  the 
debt,  there  would  be,  in  each  case,  an  absolute  profit  to  the  creditor.  As  his 
capital  will  remain  entire,  the  value  of  it  will  increase  with  every  decrease 
of  the  rate  of  interest. 

The  third  plan  proceeds  upon  the  like  supposition  of  a  successive  fall  in 
the  rate  of  interest.  And  upon  that  supposition  offers  an  equivalent  to  the 
creditor.  One  hundred  dollars,  bearing  an  interest  of  six  per  cent,  for  five 
years*  or  five  per  cent,  for  fifteen  years;  and  thenceforth  of  four  per  cent, 
(these bein«>'  the  successive  rates  of  interest  in  the  market,)  is  equal  to  a  cap- 
ital of  $122,  510725  parts,  bearing  an  interest  of  four  per  cent,  which, 
converted  into  a  capital,  bearing  a  fixed  rate  of  interest  of  six  per  cent.,  is 
equal  to  $81,  6738166  parts. 

The  difference  between  sixty-six  dollars  and  two-thirds  of  a  dollar  (the  sum 
to  be  funded  immediately,)  and  this  last  sum,  is  $15,  0172  parts,  which,  at 
six  per  cent,  per  annum,  amounts,  at  the  end  of  ten  years,  to  $26,  8755 
parts,  the  sum  to  be  funded  at  the  expiration  of  that  period.     It  ought,  how- 


2790.1  SECRETARY  OF  THE  TREASURY.  jg 

ever,  to  be  acknowledged  that  this  calculation  does  not  make  allowance  for  the 
principle  of  redemption,  which  the  plan  itself  includes;  upon  which  principle 
the  equivalent  in  a  capital  of  six  per  cent,  would  be,  by  strict  calculation,  $87, 
50766  parts. 

But  there  are  two  considerations  which  induce  the  Secretary  to  think 
that  the  one  proposed  would  operate  more  equitably  than  this:  One  is,  that 
it  may  not  be  very  early  in  the  power  of  the  United  States  to  avail  them- 
selves of  the  right  of  redemption  reserved  in  the  plan:  the  other  is,  that  with 
regard  to  the  part  to  be  funded  at  the  end  of  ten  years,  the  principle  of  re- 
demption is  suspended  during  that  time,  and  the  full  interest  of  six  per  cent, 
goes  on  improving  at  the  same  rate;  which,  for  the  last  five  years,  will  ex- 
ceed the  market  rate  of  interest,  according  to  the  supposition. 

The  equivalent  is  regulated  in  this  plan,  by  the  circumstance  of  fixing  the 
rate  of  interest  higher  than  it  is  supposed  it  will  continue  to  be  in  the 
market,  permitting  only  a  gradual  discharge  of  the  debt,  in  an  established 
proportion,  and  consequently  preventing  advantage  being  taken  of  any  de- 
crease of  interest  below  the  stipulated  rate. 

Thus  the  true  value  of  eighty-one  dollars  and  sixty-seven  cents,  the  capi- 
tal proposed,  considered  as  a  perpetuity,  and  bearing  six  per  cent,  interest, 
when  the  market  rate  of  interest  was  five  per  cent,  would  be  a  small  fraction 
more  than  ninety-eight  dollars;  when  it  was  four  per  cent,  would  be  one 
hundred  and  twenty-two  dollars  and  fifty-one  cents.  But  the  proposed  capi- 
tal being  subject  to  gradual  redemption,  it  is  evident,  that  its  value,  in  each 
case,  would  be  somewhat  less.  Yet  from  this  may  be  perceived  the  manner 
in  which  a  less  capital,  at  a  fixed  rate  of  interest,  becomes  an  equivalent  for 
a  greater  capital,  at  a  rate  liable  to  variation  and  diminution. 

It  is  presumable  that  those  creditors-  who  do  not  entertain  a  favorable 
opinion  of  property  in  western  lands,  will  give  a  preference  to  this  last  mode 
of  modelling  the  debt.  The  Secretary  is  sincere  in  affirming,  that,  in  his 
opinion,  it  will  be  likely  to  prove,  to  the  full,  as  beneficial  to  the  creditors, 
as  a  provision  for  his  debt  upon  its  present  terms. 

It  is  not  intended,  in  either  case,  to  oblige  the  government  to  redeem,  in 
the  proportion  specified,  but  to  secure  to  it  the  right  of  doing  so,  to  avoid 
the  inconvenience  of  a  perpetuity. 

The  fourth  and  fifth  plans  abandon  the  supposition  which  is  the  basis  of 
the  two  preceding  ones,  and  offer  only  four  per  cent,  throughout. 

The  reason  of  this  is,  that  the  payment  being  deferred,  there  will  be  an 
accumulation  of  compound  interest,  in  the  intermediate  period,  against  the 
public,  which,  without  a  very  provident  administration,  would  turn  to  its 
detriment.  And  the  suspension  of  the  burthen  would  be  too  apt  to  beget  a 
relaxation  of  efforts  in  the  mean  time.  The  measure,  therefore,  its  object 
being  temporary  accommodation,  could  only  be  adviseable  upon  a  moderate 
rate  of  interest. 

With  regard  to  individuals,  the  inducement  will  be  sufficient  at  four  per 
cent.  There  is  no  disposition  of  money,  in  private  loans,  making  allowance 
for  the  usual  delays  and  casualties,  which  would  be  equally  beneficial  as  a 
future  provision. 

A  hundred  dollars  advanced  upon  the  life  of  a  person  of  eleven  years  old, 
would  produce  an  annuity*  of — 

* -See  Schedule  F 


Dolls. 

Parts. 

10 

346 

18 

803 

37 

286 

78 

580 

%®  REPORTS  OF  THE  [1790: 


If  commencing  at  twenty-one,  of  »  •  - 

If  commencing  at  thirty-one,  of 

If  commencing  at  forty-one,  of  ■    '  - 

If  commencing  at  fifty-one,  of    - 

The  same  sum  advanced  upon  the  chance  of  the  survivorship  of  the  young- 
est of  two  lives,  one  of  the  persons  being,  twenty -live,  the  other  thirty  years 
old,  would  produce,  if  the  youngest  of  the  two  should  survive,  an  annuity* 
for  the  remainder  of  life,  of  twenty- three  dollars  five  hundred  and  fifty -six 
parts. 

From  these  instances  may  readily  be  discerned,  the  advantages  which 
these  deferred  annuities  afford,  for  securing  a  comfortable  provision  for  the 
evening  of  life,  or  for  wives  who  survive  their  husbands. 

The  sixth  plan  also  relinquishes  the  supposition,  which  is  the  foundation 
of  the  second  and  third,  and  offers  a  higher  rate  of  interest,  upon  similar 
terms  of  redemption,  for  the  consideration  of  the  payment  of  one  half  of 
the  loan  in  specie.  This  is  a  plan  highly  advantageous  to  the  creditors  who 
may  be  able  to  make  that  payment,  while  the  specie  itself  could  be  applied 
in  purchases  of  the  debt,  upon  terms  which  Would  fully  indemnify  the  pub- 
lic for  the  increased  interest. 

It  is  not  improbable  that  foreign  holders  of  the  domestic  debt,  may  em- 
brace  this  as  a  desirable  arrangement. 

As  an  auxiliary  expedient,  and  by  way  of  experiment,  the  Secretary 
would  propose  a  loan  upon  the  principles  of  a  tontine, t — 

To  consist  of  six  classes,  composed  respectively  of  persons  of  the  follow- 
ing ages: 

First  class,  of  those  of  20  years  and  under. 

Second  class,  of  those  above  20,  and  not  exceeding  30. 

Third  class,  of  those  above  30,  and  not  exceeding  40. 

Fourth  class,  of  those  above  40,  and  not  exceeding  50. 

Fifth  class,  of  those  above  50,  and  not  exceeding  60. 

Sixth  class,  of  those  above  60. 

Each  share  to  be  two  hundred  dollars;  the  number  of  shares*  in  each  classy 
to  be  indefinite.  Persons  to  be  at  liberty  to  subscribe  on  their  own  lives,  or 
on  those  of  others  nominated  by  them. 

The  annuity  upon  a  share  in  the  first  class,  to  be  -    $  8  40- 

Upon  a  share  in  the  second,  -  -  8  65 

Upon  a  share  in  the  third,  -  -  9  00 

Upon  a  share  in  the  fourth,  -  -  9  65 

Upon  a  share  in  the  fifth,  -  -  10  70 

Upon  a  share  in  the  sixth,  -  -  12  80 

The  annuities  of  those  who  die,  to  be  equally  divided  among  the  survi- 
vers,  until  four-fifths  shall  be  dead,  when  the  principle  of  survivorship  shall 
cease,  and  each  annuitant  thenceforth  enjoy  his  dividend  as  a  several  annuity 
during  the  life  upon  which  it  shall  depend. 

These  annuities  are  calculated  on  the  best  life  in  each  class,  and  at  a 
rate  of  interest  of  four  per  cent.,  with  some  deductions  in  favor  of  the  pub- 
lic. To  the  advantages  which  these  circumstances  present,  the  cessation  of 
the  right  of  survivorship,  on  the  death  of  four-fifths  of  the  annuitants,,  will. 
be  no  inconsiderable  addition. 

*  See  Table,  Schedule  G. 
\  See  Table,  Schedule  H. 


1790.]  SECRETARY  OF  THE  TREASURY.  gj 

The  inducements  to  individuals  are,  a  competent  interest  for  their  money 
from  the  outset,  secured  for  life,  and  the  prospect  of  continual  increase,  and 
even  of  large  profit  to  those  whose  fortune  it  is  to  survive  their  associates. 
It  will  have  appeared,  that,  in  all  the  proposed  loans,  the  Secretary  has 
contemplated  the  putting  the  interest  upon  the  same  footing  with  the  principal. 
That  on  the  debt  of  the  United  States,  he  would  have  computed  to  the  last 
of  the  present  year;  that  on  the  debt  of  the  .particular  States,  to  the  last  of 
the  year  1791:  the  reason  for  which  distinction  will  be  seen  hereafter. 

In  order  to  keep  up  a  due  circulation  of  money,  it  will  be  expedient  that 
the  interest  of  the  debt  should  be  paid  quarter  yearly.  This  regulation  will, 
at  the  same  time,  conduoe  to  the  advantage  of  the  public  creditors,  giving 
them,  in  fact,  by  the  anticipation  of  payment,  a  higher  rate  of  interest; 
which  may,  with  propriety,  be  taken  into  the  estimate  of  the  compensation 
to  be  made  to  them.  Six  per  cent,  per  annum,  paid  in  this  mode,  will  truly 
be  worth  six  dollars,  and  one  hundred  and  thirty-five  thousandth  parts  of  a 
dollar,  computing  the  market  interest  at  the  same  rate. 

The  Secretary  thinks  it  adviseable  to  hold  out  various  propositions,  all  of 
them  compatible  with  the  public  interest,  because  it  is,  in  his  opinion,  of 
the  greatest  consequence  that  the  debt  should,  with  the  consent  of  the  ere-, 
ditors,  be  remoulded  into  such  a  shape  as  will  bring  the  expenditure  of  the 
nation  to  a  level  with  its  income.       Till  this  shall  be  accomplished,  the 
finances  of  the  United  States  Avill  never  wear  a  proper  countenance.     Ar- 
rears of  interest,   continually  accruing,  will  be  as  continual  a  monument, 
either  of  inability  or  of  ill  faith,  and  will  not  cease  to  have  an  evil  influence  on 
public  credit.     In  nothing  are  appearances  of  greater  moment  than  in  what- 
ever regards  credit.      Opinion  is  the  soul  of  it;  and  this  is  affected  by  appear- 
ances, as  well  as  realities.     By  offering  an  option  to  the  creditors  between 
a  number  of  plans,  the  change  meditated  will  be  more  likely  be  accomplished. 
Different  tempers  will  be  governed  by  different  views  of  the  subject. 

But  while  the  Secretary  would  endeavor  to  effect  a  change  in  the  form  of 
the  debt  by  new  loans,  in  order  to  render  it  more  susceptible  of  an  adequate 
provision,  he  would  not  think  it  proper  to  aim  at  procuring  the  concurrence 
of  the  creditors  by  operating  upon  their  necessities. 

Hence,  whatever  surplus  of  revenue  might  remain,  after  satisfying  the  in- 
terest of  the  new  loans  and  the  demand  for  the  current  service,  ought  to  be 
divided  among  these  creditors,  if  any,  who  may  not  think  fit  to  subscribe 
to  them.  But  for  this  purpose,  under  the  circumstance  of  depending  pro^ 
positions,  a  temporary  appropriation  will  be  most  adviseable,  and  the  sum 
must  be  limited  to  four  per  cent.,  as  the  revenues  will  only  be  calculated  to 
produce  in  that  proportion  to  the  entire  debt. 

The  Secretary  confides  for  the  success  of  the  propositions  to  be  made,  on 
the  goodness  of  the  reasons  upon  which  they  rest ;  on  the  fairness  of  the 
equivalent  to  be  offered  in  each  case;  on  the  discernment  of  the  creditors  of 
their  true  interest;  and  on  their  disposition  to  facilitate  the  arrangements  of 
the  government,  and  to  render  them  satisfactory  to  the  community. 

The  remaining  part  of  the  task  to  be  performed  is  to  take  a  view  of  the 
means  of  providing  for  the  debt,  according  to  the  modification  of -it  which  is 
proposed. 

On  this  point  the  Secretary  premises,  that,  in  his  opinion,  the  funds  to 
he  established  ought,  for  the  present,  to  be  confined  to  the  existing  debt  of 
the  United  States;  as  well  because  a  progressive  augmentation  of  the  reve- 
nue will  be  most  convenient,  as  because  the,  consent  of  the  State  creditors  is 


22  REPORTS  OF  THE  [1790. 

necessary  to  the  assumption  contemplated;  and  though  the  obtaining  of  that 
consent  may  be  inferred  with  great  assurance,  from  their  obvious  interest  to 
give  it,  yet,  till  it  shall  be  obtained,  an  actual  provision  for  the  debt  would 
be  premature.  Taxes  could  not,  with  propriety,  be  laid  for  an  object  which 
depended  on  such  a  contingency. 

All  that  ought  now  to  be  done  respecting  it,  is  to  put  the  matter  in  an  ef- 
fectual train  for  a  future  provision.  For  which  purpose  the  Secretary  will, 
in  the  course  of  this  report,  submit  such  propositions  as  appear  to  him  ad- 
viseable. 

The  Secretary  now  proceeds  to  a  consideration  of  the  necessary  funds. 

It  has  been  stated  that  the  debt  of  the  United  States  consists  of  the  foreign 
debt,  amounting,  with  arrears  of  interest,  to       -  -     $11,710,378  62 

And  the   domestic  debt,  amounting,    with   like  arrears, 
computed  to  tho-end  of  the  year  1790,  to  -  -         42,414,085  94 

Making  together  ^  -      $54,124,464  56 

The  interest  on  the  domestic  debt  is  computed  to  the  end  of  this  year,  be- 
cause the  details  of  carrying  any  plan  into  execution,  will  exhaust  the  year. 
The  annual  interest  of  the  foreign  debt  has  been  stated  at       $542,599  06 
And  the  interest  on  the  domestic  debt,  at  four  per  cent, 
would  amount  to  -  -  -  -  -         1,696,563  43 


Making  together  -  -      $2,239,163  09 

Thus,  to  pay  the  interest  of  the  foreign  debt,  and  to  pay  four  per  cent,  on 
the  whole  of  the  domestic  debt,  principal  and  interest,  forming  a  new  ca- 
pital, will  require  a  yearly  income  of  $2,239,163  09  cents. 

The  sum  which,  in  the  opinion  of  the  Secretary,  ought  now  to  be  pro- 
vided, in  addition  to  what  the  current  service  will  require. 

For,  though  the  rate  of  interest  proposed  by  the  third  plan,  exceeds  four 
per  cent,  on  the  whole  debt,  and  the  annuities  on  the  tontine  will  also  ex- 
ceed four  percent,  on  the  sums  which  may  be  subscribed;  yet,  as  the  actual 
provision  for  a  part,  is  in  the  former  case  suspended,  as  measures  for  re- 
ducing the  debt,  by  purchases,  may  be  advantageously  pursued,  and  as  the  pay- 
ment of  the  deferred  annuities  will  of  course  be  postponed,  four  per  cent,  on 
the  whole  will  be  a  sufficient  provision. 

With  regard  to  the  instalments  of  the  foreign  debt,  these,  in  the  opinion  of 
the  Secretary,  ought  to  be  paid  by  new  loans  abroad.  Could  funds  be  con- 
veniently spared  from  other  exigencies,  for  paying  them,  the  United  States 
could  illy  bear  the  drain  of  cash,  at  the  present  juncture,  which  the  measure 
would  be  likely  to  occasion. 

But  to  the  sum  which  has  been  stated  for  payment  of  the  interest,  must  be 
added  a  provision  for  the  current  service.  This  the  Secretary  estimates  at 
six  hundred  thousand  dollars,*  making,  with  the  amount  of  the  interest,  twq 
millions  eight  hundred  and  thirty-nine  thousand  one  hundred  and  sixty-three 
dollars  and  nine  cents. 

This  sum  may,  in  the  opinion  of  the  Secretary,  be  obtained  from  the  pre- 
sent duties  on  imports  and  tonnage,  with  the  additions  which,  without  any 
possible  disadvantage,  either  to  trade  or  agriculture,  may  be  made  on  wines, 
spirits,  including  those  distilled  within  the  United  States,  teas  and  coffee.... 

*  See  Schedule  I. 


1790.]  SECRETARY  OF  THE  TREASURY.  23 

The  Secretary  conceives  that  it  will  be  sound  policy  to  carry  the  duties 
upon  articles  of  this  kind  as  high  as  will  be  consistent  with  the  practicability 
of  a  safe  collection.  This  will  lessen  the  necessity  both  of  having  recourse 
to  direct  taxation,  and  of  accumulating  duties  where  they  would  be  more  in- 
convenient to  trade,  and  upon  objects  which  are  more  to  be  regarded  as  ne- 
cessaries of  life. 

That  the  articles  which  have  been  enumerated  will,  better  than  most 
others,  bear  high  duties,  can  hardly  be  a  question.  They  are  all  of  them,  in 
reality,  luxuries — the  greatest  part  of  them  foreign  luxuries — some  of  them, 
in  the  excess  in  which  they  are  used,  pernicious  luxuries.  And  there  is. 
perhaps  none  of  them  which  is  not  consumed  in  so  great  abundance,  as  may 
justly  denominate  it  a  source  of  national  extravagance  and  impoverishment. 
The  consumption  of  ardent  spirits  particularly,  no  doubt  very  much  on  ac- 
count of  their  cheapness,  is  carried  to  an  extreme  which  is  truly  to  be  rev 
gretted,  as  well  in  regard  to  the  health  and  the  morals,  as  to  the  economy  of 
the  community. 

Should  the  increase  of  duties  tend  to  a  decrease  of  the  consumption  of 
those  articles,  the  effect  would  be,  in  every  respect,  desirable.  The  saving 
which  it  would  occasion  would  leave  individuals  more  at  their  ease,  and  pro- 
mote a  more  favorable  balance  of  trade.  As  far  as  this  decrease  might  be 
applicable  to  distilled  spirits,  it  would  encourage  the  substitution  of  cider 
and  malt  liquors,  benefit  agriculture,  and  open  a  new  and  productive  source 
of  revenue. 

It  is  not,  however,  probable,  that  this  decrease  would  be  in  a  degree  which 
would  frustrate  the  expected  benefit  to  the  revenue  from  raising  the  duties. 
Experience  has  shown,  that  luxuries  of  every  kind  lay  the  strongest  hold 
on  the  attachments  of  mankind,  which,  especially  when  confirmed  by  habit, 
are  not  easily  alienated  from  them. 

The  same  fact  affords  a  security  to  the  merchant  that  he  is  not  likely  to 
be  prejudiced  by  considerable  duties  on  such  .articles.  They  will  usually 
command  a  proportional  price.  The  chief  things  in  this  view  to  be  attend- 
ed to,  are,  that  the  terms  of  payment  be  so  regulated  as  not  to  require  incon- 
venient advances,  and  that  the  mode  of  collection  be  secure. 

To  other  reasons  which  plead  for  carrying  the  duties  upon  the  articles 
which  have  been  mentioned,  to  as  great  an  extent  as  they  will  well  bear, 
may  be  added  these:  that  they  are  of  a  nature,  from  their  extensive  con- 
sumption, to  be  very  productive,  and  are  amongst  the  most  difficult  objects 
of  illicit  introduction. 

Invited  by  so  many  motives  to  make  the  best  use  of  the  resource  which 
these  articles  afford,  the  essential  inquiry  is,  in  what  mode  can  the  duties 
upon  them  be  most  effectually  collected? 

With  regard  to  such  of  them  as  will  be  brought  from  abroad,  a  duty  on 
importation  recommends  itself  by  two  leading  considerations;  one  is,  that,, 
meeting  the  object  at  its  first  entrance  into  the  country,  the  collection  is 
drawn  to  a  point,  and  so  far  simplified;  the  other  is,  that  it  avoids  the  possi- 
bility of  interference  between  the  regulations  of  the  United  States  and 
those  of  the  particular  States. 

But  a  duty,  the  precautions,  for  the  collection  of  which  should  terminate 
with  the  landing  of  the  goods,  as  is  essentially  the  case  in  the  existing  sys- 
tem, could  not,  with  safety,  be  carried  to  the  extent- which  is  contemplated. 

In  that  system,  the  evasion  of  the  duties  depends,  as  it  were,  on  a  single 
risk.  To  land  the  goods  in  defiance  of  the  vigilance  of  the  officers  of  the 
customs,  is  almost  the  sole  difficulty.     No  future  pursuit  is  materially  to  be 


£4  ■  REPORTS  OF  THE  [1790. 

apprehended.  And  where  the  inducement  is  equivalent  to  the  risk,  there  will 
be  found  too  many  who  are  willing  to  run  it.  Consequently  there  will  be 
extensive  frauds  of  the  revenue,  against  which  the  utmost  rigor  of  penal  laws 
has  proved,  as  often  as  it  has  been  tried,  an  ineffectual  guard. 

The  only  expedient  which  has  been  discovered  for  conciliating  high  duties 
with  a  safe  collection,  is  the  establishment  of  a  second,  or  interior  scrutiny. 

By  pursuing  the  article  from  its  importation  into  the  hands  of  the  dealers 
in  it,  the  risk  of  detection  is  so  greatly  enhanced,  that  few,  m  comparison, 
will  venture  to  incur  it.  Indeed,  every  dealer,  who  is  not  himself  the 
fraudulent  importer,  then  becomes,  in  some  sort,  a  sentinel  upon  him. 

The  introduction  of  a  system  founded  on  this  principle,  in  some  shape  or 
other,  is,  in  the  opinion  of  the  Secretary,  essential  to  the  efficacy  of  every 
attempt  to  render  the  revenues  of  the  United  States  equal  to  their  exigencies, 
their  safety,  their  prosperity,  their  honor. 

Nor  is  it  less  essential  to  the  interest  of  the  honest  and  fair  trader.  It 
might  even  be  added,  that  every  individual  citizen,  besides  his  share  in  the 
general  weal,  has  a  particular  interest  in  it.  The  practice  of  smuggling  never 
fails  to  have  one  of  two  effects,  and  sometimes  unites  them  both.  Either  the 
smuggler  undersells  the  fair  trader,  as,  by  saving  the  duty,  he  can  afford  to 
do,  and  makes  it  a  charge  upon  him — or  he  sells  at  the  increased  price  occar 
sioned  by  the  duty,  and  defrauds  every  man  who  buys  of  him  of  his  share 
pf  what  the  public  ought  to  receive:  for  it  is  evident  that  the  loss  falls  ulti- 
mately upon  the  citizens,  who  must  be  charged  with  other  taxes  to  make 
good  the  deficiency,  and  supply  the  wants  of  the  State. 

The  Secretary  will  not  presume  that  the  plan  which  he  shall  submit  to  the 
consideration  of  the  House,  is  the  best  that  could  be  devised.  But  it  is  the 
one  which  has  appeared  to  him  freest  from  objections  of  any  that  has  occur- 
red, of  equal  efficacy  He  acknowledges,  too,  that  it  is  susceptible  of  im- 
provement, by  other  precautions  in  favor  of  the  revenue,  which  he  did  not 
think  it  expedient  to  add.  The  chief  outlines  of  the  plan  are  not  original: 
but  it  is  no  ill  recommendation  of  it,  that  it  has  been  tried  with  success. 

The  Secretary  accordingly  proposes — 

That  the  duties  heretofore  laid  upon  wines,  distilled  spirits,  teas,  and  cof- 
fee, should,  after  the  last  day  of  May  next,  cease;  and  that,  instead  of  them, 
the  following  duties  be  laid: 

Upon  every  gallon  of  Maderia  wine,  of  the  quality  of  London  parti culai\> 
thirty-five  cents. 

Upon  every  gallon  of  other  Madeira  wine,  thirty  cents. 

Upon  every  gallon  of  Sherry,  twenty -five  cents. 

Upon  every  gallon  of  other  wine,  twenty  cents. 

Upon  every  gallon  of  distilled  spirits,  more  than  ten  per  cent,  below 
proof,  according  to  Dicas's  hydrometer,  twenty  cents. 

Upon  every  gallon  of  those  spirits,  under  five,  and  not  more  than  ten  per 
cent,  below  proof,  according  to  the  same  hydrometer,  twenty-one  cents. 

Upon  every  gallon  of  those  spirits  of  proof,  and  not  more  than  five  per 
cent,  below  proof,  according  to  the  same  hydrometer,  twenty-two  cents. 

Upon  every  gallon  of  those  spirits  above  proof,  but  not  exceeding  twenty 
per  cent,  according  to  the  same  hydrometer,  twenty-five  cents. 

Upon  every  gallon  of  those  spirits  more  than  twenty,  and  not  more  than 
forty  per  cent,  above  proof,  according  to  the  same  hydrometer,  thirty  cents. 

Upon  every  gallon  of  those  spirits  more  than  forty  per  cent,  above  proof, 
according  to  the  same  hydrometer,  forty  cents. 

Upon  every  pound  of  H}7son  tea,  forty  cents. 


790.] 


SECRETARY  OF  TlIE  TREASURY,  %[ 


Upon  every  pound  of  other  green  tea,  twenty-four  cents. 

Upon  every  pound  of  Souchong  and  other  black  teas,  except  Bohea*  twen- 
ty cents. 

Upon  every  pound  of  Bohea  tea,-  twelve  cents. 

Upon  every  pound  of  coffee,  five  cents. 

That  upon  spirits  distilled  within  the  United  States,  from  molasses,  sugar, 
<or  other  foreign  materials,  there  be  paid — - 

Upon  every  gallon  of  those  spirits  more  than  ten  per  cent,  below  proof,' 
according  to  Dicas's  hydrometer,  eleven  cents. 

Upon  every  gallon  of  those  spirits  under  five,  and  not  more  than  ten  per 
cent,  below  proof,  according  to  the  same  hydrometer,  twelve  cents. 

Upon  every  gallon  of  those  spirits  of  proof,  and  not  more  than  five  per 
cent  below  proof,  according  to  the  same  hydrometer,  thirteen  cents. 

Upon  every  gallon  of  those  spirits  above  proof,  but  not  exceeding  twenty 
per  cent.,  according  to  the  same  hydrometer,  fifteen  cents. 

Upon  every  gallon  of  those  spirits  more  than  twenty,  and  not  more  than 
forty  per  cent,  above  proof,  according  to  the  same  hydrometer,  twenty  cents. 

Upon  every  gallon  of  those  spirits  more  than  forty  per  cent,  above  proof, 
according  to  the  same  hydrometer,  thirty  cents. 

That  upon  spirits  distilled  within  the  United  States,  in  any  city,  town, 
or  village,  from  materials  of  the  growth  or  production  of  the  United  States,, 
there  be  paid— 

Upon  every  gallon  of  those  spirits  more  than  ten  per  cent,  below  proof, 
according  to  Dicas's  hydrometer,  nine  cents.      - 

Upon  every  gallon  of  those  spirits  under  five,  and  not  more  than  ten  per 
cent,  below  proof,  according  to  the  same  hydrometer,  ten  cents. 

Upon  every  gallon  of  those  spirits  of  proof,  and  not  more  than  five  per 
cent,  below  proof,  according  to  the  same  hydrometer,  eleven  cents. 

Upon  every  gallon  of  those  spirits  above  proof,  but  not  exceeding  twenty 
per  cent,  according  to  the  same  hydrometer,  thirteen  cents. 

Upon  every  gallon  of  those  spirits  more  than  twenty,  and  not  more  than 
forty  per  cent,  above  proof,  according  to  the  same  hydrometer,  seventeen 
cents. 

Upon  every  gallon  of  those  spirits  more  than  forty  per  cent,  above  proof, 
according  to  the  same  hydrometer,  twenty-five  cents. 

That  upon- all  stills  employed  in  distilling  spirits  from  materials  of  the 
growth  or  production  of  the  United  States,  in  any  other  place  than  a  city, 
town,  or  village,  there  be  paid  the  yearly  sum  of  sixty  cents,  for  every  gallon, 
English  wine  measure,  of  the  capacity  of  each  still,  including  its  head. 

The  Secretary  does  not  distribute  the  duties  on  teas  into  different  classes, 
as  has  been  done  in  the  impost  act  of  the  last  session;  because  this  distribu- 
tion depends  on  considerations  of  commercial  policy,  not  of  revenue.  It  is 
sufficient,  therefore,  for  him,  to  remark,  that  the  rates  above'  specified  are- 
proposed  with  reference  to  the  lowest  class. 

The  Secretary,  conceiving  that  he  could  not  convey  an  accurate  idea  of 
the  plan  contemplated  by  him,  for  the  collection  of  these  duties,  in  any  mode 
so  effectual  as  by  the  draft  of  a  bill  for  the  purpose,  begs  leave  respectfully 
to  refer  the  House  to  that  which  will  be  found  annexed  to  this  report,  re- 
latively to  the  article  of  distilled  spirits;  and  which,  for  the  better  explana- 
tion of  some  of  its  parts,  is  accompanied  with  marginal  remarks. 

It  would  be  the  intention  of  the  Secretary,  that  the  duty  on  wines  should 
he  collected  upon  precisely  the  sarrieplah  with  that  on  imported  spirits, 


26  REPORTS  OF  THE  [1790. 

But  with  regard  to  teas  and  coffee,  the  Secretary  is  inclined  to  think 
that  it  will  be  expedient,  till  experience  shall  evince  the  propriety  of  going 
further,  to  exclude  the  ordinary  right  of  the  officers  to  visit  and  inspect  the 
places  in  which  those  articles  may  be  kept.  The  other  precautions,  without 
this,  will  afford,  though  not  complete,  considerable  security. 

It  will  not  escape  the  observation  of  the  House,  that  the  Secretary,  in  the 
plan  submitted,  has  taken  the  most  scrupulous  care,  that  those  citizens  upon 
whom  it  is  immediately  to  operate,  be  secured  from  every  species  of  inju- 
ry by  the  misconduct  of  the  officers  to  be  employed.  There  are  not  only 
strong  guards  against  their  being  guilty  of  abuses  of  authority;  they  are  not 
only  punishable,  criminally,  for  any  they  may  commit,  and  made  answerable 
in  damages,  to  individuals,  for  whatever  prejudice  these  may  sustain  by  their 
acts  or  neglects;  but  even  where  seizures  are  made  with  probable  cause,  if 
there  be  an  acquittal  of  the  articles  seized,  a  compensation  to  the  proprie- 
tors for  the  injury  their  property  may  suffer,  and  even  for  its  detention,  is  to 
be  made  out  of  the  public  treasury. 

So  solicitous  indeed  has  the  Secretary  been,  to  obviate  every  appearance 
of  hardship,  that  he  has  even  included  a  compensation  to  the  dealers  for 
their  agency  in  aid  of  the  revenue. 

With  all  these  precautions  to  manifest  a  spirit  of  moderation  and  justice  on 
the  part  of  the  government;  and  when  it  is  considered,  that  the  object  of 
the  proposed  system  is  the  firm  establishment  of  public  credit;  that  on  this 
depends  the  character,  security  and  prosperity  of  the  nation;  that  advantages 
in  every  light  important  may  be  expected  to  result  from  it;  that  the  immedi-* 
ate  operation  of  it  will  be  upon  an  enlightened  class  of  citizens,  zealously 
devoted  to  good  government,  and  to  a  liberal  and  enlarged  policy;  and 
that  it  is  peculiarly  the  interest  of  the  virtuous  part  of  them  to  co-operate  in 
whatever  will  restrain  the  spirit  of  illicit  traffic;  there  will  be  perceived  to  exist 
the  justest  ground  of  confidence,  that  the  plan,  if  eligible  in  itself,  will  experi- 
ence the  cheerful  and  prompt  acquiescence  of  the  community. 

The  Secretary  computes  the  nett  product  of  the  duties  proposed  in  this 
report,  at  about  one  million  seven  hundred  and  three  thousand  four  hundred 
dollars,  according  to  the  estimate  in  schedule  K,  which,  if  near  the  truth, 
will,  together  with  the  probable  product  of  the  duties  on  imports  and  ton- 
nage, complete  the  sum  required. 

But  it  will  readily  occur,  that,  in  so  unexplored  a  field,  there  must  be  a 
considerable  degree  of  uncertainty  in  the  data  ;  and  that,  on  this  account,  it 
will  be  prudent  to  have  an  auxiliary  resource  for  the  first  year  in  which  the 
interest  will  become  payable,  that  there  may  be  no  possibility  of  disappoint- 
ment to  the  public  creditors,  ere  there  may  be  an  opportunity  of  providing 
for  any  deficiency  which  the  experiment  may  discover.  This  will  accord- 
ingly be  attended  to. 

The  proper  appropriation  of  the  funds  provided,  and  to  be  provided, 
seems  next  to  offer  itself  to  consideration. 

On  this  head  the  Secretary  would  propose,  that  the  duties  on  distilled 
spirits  should  be  applied,  in  the  first  instance,  to  the  payment  of  the  interest 
of  the  foreign  debt. 

That,  reserving  out  of  the  residue  of  those  duties  an  annual  sum  of  six 
hundred  thousand  dollars  for  the  current  service  of  the  United  States,  the 
surplus,  together  with  the  product  of  the  other  duties,  be  applied  to  the  pay- 
ment of  the  interest  on  the  new  loan,  by  an  appropriation  co-extensive  with 
1  he  duration  of  the  debt. 


1790.]  SECRETARY  OF  THE  TREASURY.  c^ 

And  that,  if  any  part  of  the  debt  should  remain  unsubscribed,  the  excess 
of  the  revenue  be  divided  among  the  creditors  of  the  unsubscribed  part,  by  a 
temporary  disposition — with  a  limitation,  however,  to  four  per  cent. 

It  will  hardly  have  been  unnoticed  that  the  Secretary  has  been  thus  far 
silent  on  the  subject  of  the  Post  Office.  The  reason  is,  that  he  has  had  in 
view  the  application  of  the  revenue  arising  from  that  source  to  the  purpose 
of  a  sinking  fund.  The  Postmaster  General  gives  it  as  his  opinion,  that  the 
immediate  product  of  it,  upon  a  proper  arrangement,  would  probably  be  not 
less  than  one  hundred  thousand  dollars.  And  from  its  nature,  with  good 
management,  it  must  be  a  growing,  and  will  be  likely  to  become  a  considera- 
ble fund.  The  Postmaster  General  is  now  engaged  in  preparing  a  plan 
which  will  be  the  foundation  of  a  proposition  for  a  new  arrangement  of  the 
establishment  This,  and  some  other  points  relative  to  the  subject  referred 
to  the  Secretary,  he  begs  leave  to  reserve  for  a  future  report. 

Persuaded,  as  the  Secretary  is,  that  the  proper  funding  of  the  present  debt 
will  render  it  a  national  blessing,  yet  he  is  so  far  from  acceding  to  the  posi- 
tion in  the  latitude  in  which  it  is  sometimes  laid  down,  that  "public  debts 
are  public  benefits,"  a  position  inviting  to  prodigality,  and  liable  to  danger- 
ous abuse,  that  he  ardently  wishes  to  see  it  incorporated,  as  a  fundamental 
maxim  in  the  system  of  public  credit  of  the  United  States,  that  the  creation 
•of  debt  should  always  be  accompanied  with  the  means  of  extinguishment. 
This  he  regards  as  the  true  secret  for  rendering  public  credit  immortal.  And 
he  presumes,  that  it  is  difficult  to  conceive  a  situation  in  which  there  may 
not  be  an  adherence  to  the  maxim.  At  least,  he  feels  an  unfeigned  solici- 
tude that  this  may  be  attempted  by  the  United  States,  and  that  they  may 
commence  their  measures  for  the  establishment  of  credit  with  the  observ- 
ance of  it. 

Under  this  impression,  the  Secretary  proposes  that  the  nett  product  of 
•the  Post  Office,  to  a  sum  not  exceeding  one  million  of  dollars,  be  vested  in 
Commissioners,  to  consist  of  the  Vice-President  of  the  United  States,  or 
President  of  the  Senate,  the  Speaker  of  the  House  of  Representatives,  the 
Chief  Justice,  Secretary  of  the  Treasury,  and  Attorney  General  of  the 
United  States,  for  the  time  being,  in  trust;  to  be  applied  by  them,  or  any 
three  of  them,  to  the  discharge  of  the  existing  public  debt,  either  by  pur- 
chases of  stock  in  the  market,  or  by  payments  on  account  of  the  principal, 
as  shall  appear  to  them  most  adviseable,  in  conformity  to  public  engage- 
ments; to  continue  so  vested,  until  the  whole  of  the  debt  shall  be  discharged. 

As  ah  additional  expedient  for  effecting  a  reduction  of  the  debt,  and  for 
other  purposes  which  will  be  mentioned,  the  Secretary  would  further  pro- 
pose, that  the  same  Commissioners  be  authorized,  with  the  approbation  of 
the  President  of  the  United  States,  to  borrow,  on  their  credit,  a  sum  not  ex- 
ceeding twelve  millions  of  dollars,  to  be  applied — - 

First.  To  the  payments  of  the  interest  and  instalments  of  the  foreign 
debt,  to  the  end  of  the  present  year,  which  will  require  $3,491,923  and  46 
cents. 

Secondly.  To  the  payment  of  any  deficiency  which  may  happen  in  the 
product  of  the  funds  provided  for  paying  the  interest  of  the  domestic  debt. 

Thirdly.  To  the  effecting  a  change  in  the  form  of  such  part  of  the  foreign 
debt,  as  bears  an  interest  of  five  per  cent.  It  is  conceived  that,  for  this  pur- 
pose, a  new  loan,  at  a  lower  interest,  may  be  combined  with  other  expe- 
dients. The  remainder  of  this  part  of  the  debt,  after  paying  the  instalments 
which  will  accrue  in  the  course  of  1790.,  will  be  $>3.,8S8,888  and  81  Gents. 
5 


28  REPORTS  OF  THE  [1790. 

Fourthly.  To  the  purchase  of  the  public  debt  at  the  price  it  shall  bear  in 
the  market,  while  it  continues  below  its  true  value.  This  measure,  which 
would  be,  in  the  opinion  of  the  Secretary,  highly  dishonorable  to  the  go- 
vernment, if  it  were  to  precede  a  provision  for  funding  the  debt,  would  be- 
come altogether  unsxceptionable  after  that  had  been  made.  Its  effect  would 
be  in  favor  of  the  public  creditors,  as  it  would  tend  to  raise  the  value  of 
stock:  and  all  the  difference  between  its  true  value  and  the  actual  price, 
would  be  so  much  clear  gain  to  the  public.  The  payment  of  foreign  inter 
est  on  the  capital  to  be  borrowed  for  this  purpose,  should  that  be  a  neces- 
sary consequence,  would  not,  in  the  judgment  of  the  Secretary,  be  a  good 
objection  to  the  measure.  The  saving  by  the  operation,  would  be  itself  a 
sufficient  indemnity;  and  the  employment  of  that  capital,  in  a  country 
situated  like  this,  would  much  more  than  compensate  for  it.  Besides,  if  the 
government  does  not  undertake  this  operation,  the  same  inconvenience 
which  the  objection  in  question  supposes,  would  happen  in  another  way, 
with  a  circumstance  of  aggravation.  As  long  at  least  as  the  debt  shall  continue 
below  its  proper  value,  it  will  be  an  object  of  speculation  to  foreigners,  who 
will  not  only  receive  the  interest  upon  what  they  purchase,  and  remit  it 
abroad,  as  in  the  case  of  the  loan,  but  will  reap  the  additional  profit  of  the 
difference  in  value.  By  the  government's  entering  into  competition  with 
them,  it  will  not  only  reap  a  part  of  the  profit  itself,  but  will  contract  the 
extent,  and  lessen  the  extra  profit  of  foreign  purchasers.  That  competition 
will  accelerate  the  rise  of  stock,  and  whatever  greater  rate  this  obliges 
foreigners  to  pay  for  what  they  purchase,  is  so  much  clear  saving  to  the  na- 
tion. In  the  opinion  of  the  Secretary,  and  contrary  to  an  idea  which  is  not 
without  patrons,  it  ought  to  be  the  policy  of  the  government  to  raise  the 
value  of  stock  to  its  true  standard,  as  fast  as  possible.  When  it  arrives  to 
that  point,  foreign  speculations  (which,  till  then,  must  be  deemed  pernicious, 
further  than  as  they  serve  to  bring  it  to  that  point,)  will  become  beneficial. 
Their  money,  laid  out  in  this  country  upon  our  agriculture,  commerce,  and 
manufactures,  will  produce  much  more  to  us  than  the  income  they  will  re- 
ceive from  it. 

The  Secretary  contemplates  the  application  of  this  money  through  the 
medium  of  a  national  bank,  for  which,  with  the  permission  of  the  House, 
he  will  submit  a  plan  in  the  course  of  the  session. 

The  Secretary  now  proceeds,  in  the  last  place,  to  offer  to  the  considera- 
tion of  the  House,  his  ideas  of  the  steps  which  ought,  at  the  present  session, 
to  be  taken  towards  the  assumption  of  the  State  debts. 

These  are,  briefly,  that  concurrent  resolutions  of  the  two  Houses,  with  the 
approbation  of  the  President,  be  entered  into,  declaring  in  substance — 

That  the  United  States  do  assume,  and  will,  at  the  first  session  in  the  year 
1791,  provide,  on  the  same  terms  with  the  present  debt  of  the  United 
States,  for  all  such  part  of  the  debts  of  the  respective  States,  or  any  of 
them,  as  shall,  prior  to  the  first  day  of  January,  in  the  said  year,  1791,  be 
subscribed  towards  a  loan  to  the  United  States,  upon  the  principles  of  either 
of  the  plans,  which  shall  have  been  adopted  by  them,  for  obtaining  a  re- 
loan  of  their  present  debt. 

Provided,  that  the  provision  to  be  made  as  aforesaid,  shall  be  suspended, 
with  respect  to  the  debt  of  any  State,  which  may  have  exchanged  the  secu- 
rities of  the  United  States  for  others  issued  by  itself,  until  the  whole  of  the 
said  securities  shall  either  be  re-exchanged  or  surrendered  to  the  United  States. 


1790.]  SECRETARY  OF  THE  TREASURY.  09 

And  provided  also,  that  the  interest  upon  the  debt  assumed,  be  computed 
to  the  end  of  the  year  1791;  and  that  the  interest  to  be  paid  by  the  United 
States,  commence  on  the  first  day  of  January,  1792. 

That  the  amount  of  the  debt  of  each  State  so  assumed  and  provided  for, 
be  charged  to  such  State  in  account  with  the  United  States,  upon  the  same 
principles  upon  which  it  shall  be  lent  to  the  United  States. 

That  subscriptions  be  opened  for  receiving  loans  of  the  said  debts,  at  the 
same  times  and  places,  and  under  the  like  regulations,  as  shall  have  been 
prescribed  in  relation  to  the  debt  of  the  United  States. 

The  Secretary  has  now  completed  the  objects  which  he  proposed  to  him- 
self to  comprise  in  the  present  report.  He  has,  for  the  most  part,  omitted 
details,  as  well  to  avoid  fatiguing  the  attention  of  the  House,  as  because 
more  time  would  have  been  desirable  even  to  digest  the  general  principles 
of  the  plan.  If  these  should  be  found  right,  the  particular  modifications 
will  readily  suggest  themselves  in  the  progress  of  the  work. 

The  Secretary,  in  the  views  which  have  directed  his  pursuit  of  the  subject, 
has  been  influenced,  in  the  first  place,  by  the  consideration,  that  his  duty, 
from  the  very  terms  of  the  resolution  of  the  House,  obliged  him  to  propose 
what  appeared  to  him  an  adequate  provision  for  the  support  of  the  public 
credit,  adapted  at  the  same  time  to  the  real  circumstances  of  the  United 
States;  and,  in  the  next,  by  the  reflection,  that  measures  which  will  not  bear 
the  test  of  future  unbiassed  examination,  can  neither  be  productive  of  indi- 
vidual reputation,  nor  (which  is  of  much  greater  consequence)  public  honor 
or  advantage. 

Deeply  impressed,  as  the  Secretary  is,  with  a  full  and  deliberate  convic- 
tion that  the  establishment  of  public  credit,  upon  the  basis  of  a  satisfactory 
provision  for  the  public  debt,  is,  under  the  present  circumstances  of  this 
country, the  true  desideratum  towards  relief  from  individual  and  national  em- 
barrassments; that,  without  it,  these  embarrassments  will  be  likely  to  press 
still  more  severely  upon  the  community — he  cannot  but  indulge  an  anxious 
wish,  that  an  effectual  plan  for  that  purpose  may,  during  the  present  session, 
be  the  result  of  the  united  wisdom  of  the  legislature. 

He  is  fully  convinced,  that  it  is  of  the  greatest  importance,  that  no  further 
delay  should  attend  the  making  of  the  requisite  provision:  not  only  because 
it  will  give  a  better  impression  of  the  good  faith  of  the  country,  and  will 
bring  earlier  relief  to  the  creditors — both  which  circumstances  are  of  great 
moment  to  public  credit — but  because  the  advantages  to  the  community,  from 
raising  stock,  as  speedily  as  possible,  to  its  natural  value,  will  be  incompara- 
bly greater,  than  any  that  can  result  from  its  continuance  below  that  stand- 
ard. No  profit  which  could  be  derived  from  purchases  in  the  market,  on 
account  of  the  government,  to  any  practicable  extent,  would  be  an  equiva- 
lent for  the  loss  which  would  be  sustained  by  the  purchases  of  foreigners  at 
a  low  value.  Not  to  repeat,  that  governmental  purchases,  to  be  honorable, 
ought  to  be  preceded  by  a  provision.  Delay,  by  disseminating  doubt, 
would  sink  the  price  of  stock;  and  as  the  temptation  to  foreign  speculations, 
from  the  lowness  of  the  price,  would  be  too  great  to  be  neglected,  millions 
would  probably  be  lost  to  the  United  States. 

All  which  is  humbly  submitted. 

ALEXANDER  HAMILTON, 
Secretary  of  the  Treasury. 


so 


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1790.]  SECRETARY  OF  THE  TREASURY.  31 

SCHEDULE  B. 

*ft  General  Statement  of  the  Foreign  Loans;  showing,  in  abstract,  the 
capital  sums  borrowed,  and  the  arrearages  of  interest,  to  the  3\st  of 
December,  1789. 

Capital  sums  borrowed. 

Of  the  Royal  French  Treasury,  on  interest  at 

5  per  cent.  ...  -  24,000,000 

In  Holland,  guarantied  by  the  French  Court,  at 

4  per  cent.  ...  .  -  10,000,000 

Livres  34,000,000  $6,296,296  00 

Of  the  Royal  Spanish  Treasury,  at  5  per  cent  -  -  174,011  00 

Lenders  in  Holland: 

First  loan,    5  per  cent.  -  -  -  5,000,000 

Second  do.  4  per  cent.  -  2,000,000 

Third     do.  5  per  cent.  -  -  -  1,000,000 

Fourth  do.  5  per  cent.  -  -  -  1,000,000 

Floriiis      9,000,000    3,600,000  00 

Capital,  $  10,070,307  0© 

Arrearages  of  Interest  to  31st  December,  1189. 

On  the  French  Loan. 

4789,  January  1. — Five  years  interest  on  the 

6,000,000  livres,  at  five  per  cent.         $211,111  77 

September  3.-— Six  years  interest  on  the 

18,000,000  at  five  per  cent.  -  999,999  96 

November  5. — Four  years  interest  on  the 

10,000,000,  at  four  per  cent.         -         296,296  00 

On  the  Spanish  Loan. 

Arrearages  on  the  Spanish  loan  of  g  174,011,  to 

21st  March,  1782,  at  five  percent.  -  5,093  27 

March  21st,  seven  years  interest  on  ditto.  60,904  62 


1,640,071  62 


Total,         #11,710,378  62 


Note. — There  were  certain  parts  of  the  capital  of  the  Dutch  guarantied 
loan  of  10,000,000  florins,  and  of  the  French  loan  of  18,000,000  livres, 
which  became  due  at  the  following  periods,  and  remain  unpaid,  viz: 

17g7  C  Sept.  3,  first  payment  of  the  18,000,000,  1,500,000  g  277,777  77 

I  Nov.  5,  first      ditto    of  the  10,000,000,  1,000,000  185,185  19 

i7bc  S  Sept.  3,  second  ditto  of  the  18,000,000,?  .,  ._„  n._  no 

1788  \  Nov.  5,  second  ditto  of  the  10  OOolooo,  J  the  Same>  462>9S2  9g 


32  REPORTS  OF  THE  T1790, 

17ftQ  CSept.  3,  third  payment  of  the  18,000,000,  >  ■',  ~  „.rt  __  fto 

1789  ^  Nov.  5,  third      ditto     of  the  lo!ooo,00(>;  J  the  Same'  * 462'962  96 

$  1,388,888  88 

Treasury  Department,  Register's  Office,  3lst  Dec.  1789. 

JOSEPH  NOURSE,  Register. 

To  the  arrearage  of  interest  to  31st  December,  1789,  above 

stated,  amounting  to  -      $  1,640,071  62 

Add  one  year's  interest,  from  1st  January  to  31st  December, 
1789,  on  1S6,427  dollars  and  69  cents,  being  the  amount 
of  principal -sum  due  to  foreign  officers  employed  in  the 
service  of  the  United  States,  which  interest  is  annually  pay- 
able at  the  house  of  Monsieur  Grand,  banker,  at  Paris,  at 
six  per  cent.  -  11,185  66 


Arrearages  of  interest  to  31st  December,  1789     -  -      $1,651,257  28 

The  above  addition  was  adverted  to  after  the  conclusion  of  the  report;  but 
as  it  makes  no  material  difference,  an  alteration  in  consequence  of  it  is 
deemed  unnecessary. 

ALEXANDER  HAMILTON, 

Secretary  of  the  Treasury^ 


SCHEDULE  C. 

Abstract  of  the  Liquidated  and  Loan  Office  debt  of  the  United  States, 
on  the  3d  March,  1789. 

Dolls.     90tks. 

Registered  debt  ....  $4,598,462  78 

Credits  given  to  sundries  on  the  Treasury  books,  by  virtue 
of  special  acts  of  Congress,  which  are  not  yet  put  on  the 
funded  debt  ...  -  .  187,578  65 

Certificates  issued  by  Commissioner  of  Army  Accounts,  de- 
ducting those  which  have  been  cancelled  and  registered         7,967,109  73 

Certificates  issued  by  the  Commissioners  of  the  five  Depart- 
ments, deducting  those  which  have  been  cancelled  and 
registered  -  903,574  59 

Certificates  issued  by  the  late  State  Commissioners,  deduct- 
ing those  which  have  been  cancelled  and  registered  3,291,156  37 

Loan  Office  Certificates  issued  in  1781,  and  expressed  as 
specie  value,  deducting  those  which  have  been  cancelled 
and  registered         -  -  -  -         .    -  112,704  15 

Loan  Office  Certificates,  old  emissions,  reduced  to  specie 
value,  agreeably  to  the  scale  made  by  Congress,  by  taking 
the  medium  of  the  loans  made  in  each  month,  viz:  three 
millions  seven  hundred  and  eighty-seven  thousand  nine 
hundred  dollars  loaned  to  first  September,  1777,  equal 
to  .••'-''.-.-.-  3,787,900  00 


1790.]  SECRETARY  OF  THE  TREASURY.  33 

Dolls.     90ths, 
$3,459,000,  between  1st  September,  1777, 

and  1st  March,  1778  -  -  2,538,572  00 

$59,830,212,   between   1st  March,   1778, 

and  the  close  of  the  Loan  Offices     -  5,146,330  00 


11,472,802  00 


Deduct  specie  amount  cancelled  and  regis- 
tered ...  _  365,983  15 


11,106,818  75 


Foreign  officers,  amount  to  their  credit,  the  interest  where- 
of is  payable  at  the  house  of  Mons.  Grand,  banker,  at 
Paris,  and  included  in  the  estimate  of  foreign  interest  186,427  69 


28,343,833  21 


From  which  deduct  this  sum  received  into  the  Treasury, 

on  account  of  lands  and  other  property,  and  cancelled  960,915  44 

Leaves  the  amount  of  the  domestic  debt         -       $27,383,917  74 


On  the  certificates  issued  between  the  1st  September,  1777,  and  1st  March, 
1778,  interest  is  payable  on  the  nominal  sum,  (being  g  3,459,000,)  although, 
the  specie  value  of  the  principal  is  only  g  2,538,572. 

Register's  Office,  March  3d,  1789. 

JOSEPH  NOURSE,  Register. 

Treasury  Department, 

Register's  Office,  January  1st,  1790. 

The  above  estimate  was  formed  to  the  expiration  of  the  late  government. 
Some  variation  hath  since  taken  place  in  the  several  parts,  without  making 
any  material  alteration  in  the  aggregate  amount  of  the  domestic  debt.  This 
arises  from  a  daily  exchange,  at  the  Treasury,  of  Loan  Office  and  Final  Set 
tlement  Certificates,  for  Treasury  certificates  given  as  evidences  of  the  re- 
gistered debt,  whereby  the  increase  of  the  latter  is  carried  on  in  proportion 
to  the  cancelment  of  the  former. 

JOSEPH  NOURSE,  Register. 


SCHEDULE  D. 

*fln  estimate  of  all  the  interest  which  tcill  accrue  on  the  Domestic  Debt  of 
the  United  States,  from  its  formation  to  the  3l$t  December,  1790;  of 
such  partial  payments  as  have  been  made  on  account  thereof;  and  of 
the  balance  which  will  remain  to  be  provided  for,  to  pay  up  the  inte- 
rest fully  to  that  period. 

The  total  amount  of  interest  arising  on  the  Loan  Office  debt,  from  the  open- 
ing of  the  several  offices  in  1776  to  31st  December,  1790     89,534,478  00 


34  REPORTS  OF  THE 

The  total  amount  of  interest  arising  on  the  Army  debt, 
from  the  several  periods  of  its  drawing  interest  to  31st 
December,  1790  -  $5,105,099  00 

The  total  amount  of  interest  arising  on  certificates  issued 

by  the  thirteen  State  Commissioners,  estimated  at     •     -       2,146,799  00 

The  total  amount  of  interest  arising  on  certificates  issued  by 
the  Commissioners,  for  the  Commissaries,  Quartermas- 
ter's, Marine  clothing,  and  Hospital  Departments,  esti- 
mated at  -  -  -  -  -"'''-  737,338  00 

The  total  amount  of  interest  arising  on  the  debt  registered 

at  the  Treasury,  estimated  at     -  -  -  -  366,646  00 

The  total  amount  of  interest  on  debts  entered  in  the  Trea- 
sury books,  but  for  which  certificates  have  not  been  is- 
sued by  the  Register,  so  as  to  become  a  part  of  the  re- 
gistered debV estimated  at         -  -  -  -  83,936  00 

Total         $  17,974,296  00 

From  this  total  amount  of  interest  the 

following  deductions  are  to  be  made,  viz: 

So  much  paid   on  the  Loan  Office  debt 

in  old  emission,  equal  to  -  g  372,368  30 

In  new  emissions,  as  specie  -  39,433  49 

In  bills  of  exchange,  as  specie,  1,663,992  00 

So  much  paid  by  the  several  States  in  In- 
dents, paid  into  the  Treasury  on  ac- 
count of  their  quotas  on  the  existing  re- 
quisitions of  the  late  Congress  -         2,244,231  31 

So  much  paid  by  the  State  of  New  Jersey 
to  their  own  citizens  on  the  domestic 
debt,  not  included  in  the  schedule  of 
taxes  -  424,442  22 

So  much  paid  by  the  State  of  South  Caro- 
lina, being  two  years  interest  on 
g> 222,465  -/oths,  the  amount  of  certifi- 
cates issued  to  the  line  of  that  State,  at 
six  per  cent.,  is  -  26,695  73 


Total  amount  of  interest  paid  -  $  4,771,1 63  05 
Deduct  three  years  interest,  estimated  in 
the  foregoing,  on  $960,915  42,  being 
so  much  of  the  capital  of  the  domestic 
debt  received  in  payment  for  lands,  and 
other  public  property  -  -  172,964  75 


Total  amount  of  deductions  -  4,944,127  80 


Leaves  a  balance  of  thirteen  millions  and  thirty  thousand 
one  hundred  and  sixty-eight  dollars,  and  twenty  cents, 
which  will  accrue  on  the  domestic  debt,  and  for  which 
provision  is  to  be  mad<j  to  pay  the  interest  fully,  up  to 
the  31st  December,  1790     '    -  -  -  -     $13,030,168  20 


1790/ 


SECRETARY  OF  THE  TREASURY. 


35 


It  is  to  be  observed,  that,  as  the  certificates  which  have  been  issued  for 
the  principal  of  a  debt  of  more  than  twenty-seven  millions  of  dollars,  are, 
in  themselves,  exceedingly  numerous,  and  that  as  those  several  certificates 
bear  an  interest  from  different  periods,  it  has  not  been  practicable  to  form  a 
statement  of  arrearages,  but  by  ascertaining,  in  the  most  accurate  manner,  the 
different  periods  of  time  from  which  the  several  parts  of  the  domestic  debt  bear 
interest,  and  therefrom  calculating  the  interest  to  31st  December,  1790. 

Treasury  Department.,  Register's  Office,  Slst  Dec.  1789. 

JOSEPH  NOURSE,  Register, 


SCHEDULE  E. 

Abstract  of  the  public  debt  of  the  States  under-mentioned,  agreeably  to 
statements  transmitted  in  pursuance  of  the  resolution  of  the  House 
of  Representatives  of  the  21st  of  September,  1789. 


MASSACHUSETTS. 

Principal,  with  interest  to  1st 
Nov.    1789 

Due  to  sundries,  for  which  no 
certificates  have  yet  been  is- 
sued - 


£.  s.  d. 

1 ,  548, 040  7  9,  lawful 

20,000  0  0 


Dollars.    Cts. 
Total,       1,568,040  7  9,  at  6s.  p.  dol.  5,226,801  29 

CONNECTICUT. 

Principal  bearing  interest  from 

1st  Feb.  1789  -  -         560,404  0  © 

To  which  ought  to  be  added  for 

balance  of  State  bills  emitted 

in  the  year  1780,  bearing  an 

interest  at  5  per  cent,  to  the 

1st  March,  1785,  estimated  at       24,948  0  0 

Total,     585,352  0  0,  at  6*.  p.  dol.  1,951,173  33| 

NEW  YORK.  

Principal  and  interest  computed 

to  the  1st  day  of  Jan.  1790       1,032,616  2  0 

From  which  ought  to  be  de- 
ducted, for  amount  of  princi- 
pal and  interest  of  Continen- 
tal securities  loaned  to  the 
State,  in  pursuance  of  their 
act  of' 18th  of  April,  1786, 
estimated  at  565,586  0  0 

Leaves  for  State  debt  proper    467,030  2  0,  at  8*.  p.  dol.  1,167,575  25 

NEW  JERSEY. 

Principal  unredeemed  295,755  4  11,  at  7*.  6c?.  p.  dol  788,680  65| 

6 


36  REPORTS  OF  THE  [1790. 


VIRGINIA. 

Principal  of  domestic  debt 
Ditto  of  foreign  debt,  with 
terest  to  the  1st  of  Jan.  17 

in- 
90 

£.         s.  d. 
1,063,396  17  1 

40,826   1    1 

at  6s. 

P- 

dol   3 

Dolls. 
,680,743 

Total, 

1,104,222  18  2, 

Ctsi 

021 

SOUTH  CAROLINA. 

Principal  of  domestic  debt 
Indents  of  interest  on  ditto 

circulation   - 
Foreign  debt,  principal  and 

terest,  due  to  the  1st  Jan 

ry,  1789      ~ 

in 

in- 
iia- 

1,069,652  2  4 
•      71,325  7  2 

-     115,810  0   1 

at  4s. 
Tc 

8d. 

ital, 

p.  dol. 

5,386,23. 

Totah 

1,256,787  9  7, 

2  05 

$18,201,205 

60| 

It  will  be  observed,  that  the  period  to  which  interest  is  caculated  on  the 
debts  above-mentioned,  is  only  specified  with  accuracy  on  the  statements 
which  have  been  transmitted  from  Massachusetts,  Connecticut,  and  New 
York.  From  the  best  information  which  the  Secretary  can  obtain,  he  pre- 
sumes, that  in  the  statement  made  of  the  debt  of  New  Jersey,  interest  has 
been  calculated  to  the  31st  .day  of  December,  1788;  that,  on  the  debt  of  Vir- 
ginia, interest  has  been  calculated  to  the  31st  day  of  December,  17S8;  on 
that  of  South  Carolina,  to  the  1st  day  of  April,  1790. 

From  the  States  of  New  Hampshire,  Pennsylvania,  Delaware,  Maryland, 
North  -Carolina,  and  Georgia,  no  accounts  of  their  respective  State  debts  have 
been  forwarded. 

The  Secretary  is,  however,  of  opinion,  from  the  result  of 
inquiries  made  by  him,  that  the  State  debt  of  New  Hampshire 
may  be  estimated  at  about      -  -  -  -  -  $300,000  00 

That  the  State  debt  proper  of  Pennsylvania,  (that  is,  exclu- 
sive of  their  assumption  of  the  continental  debt,)  at  about        2,200,000  00 

And  that  of  Maryland,  at  -      '  -  -     S00,000  00 

From  the  above  statement  and  estimates,  the  amount  of  principal  and  in- 
terest, (exclusive  of  Delaware,  North  Carolina,  Georgia, and  Rhode  Island,) 
appears  to  be  about  twenty-one  millions  and  a  half;  but  as  the  debts  of  the 
four  last  States  are  not  included  in  the  above  sum,  and  it  is  possible  that  a 
greater  arrearage  of  interest  may  be  due  on  the  State  debts  than  is  at  present 
ascertained,  the  aggregate  of  the  principal  and  interest  may  be  computed  at 
about  twenty-five  millions  of  dollars. 

ALEXANDER  HAMILTON, 

Secretary  of  the  Treasury^ 

COMMONWEALTH  OF  MASSACHUSETTS. 

A  statement  of  the  debt  of  the  Commonwealth  of  Massachusetts,  as  it 
respects  the  notes  issued  by  the  several  Treasurers,  to  the  first  of  No* 
vember,  1789. 

November  1,  17S9,  exclusive  of  half-pay  notes  -    £  1,403,459  16  11 


1790.]  SECRETARY  OF  THE  TREASURY.  37 

Notes  issued  to  widows  and  orphan  children  of  the  de- 
ceased officers  of  the  late  Continental  Army,  for  the 
seven  years  half-pay,  agreeable  to  resolves  of  Con- 
gress   '  -  -  -  -  -  £8,246   11    10 

Interest  on  the  foregoing  notes  since 

October  1st,  1781,  -     £579,660     6     4 

Of  which  has  been  paid     -  -        443,326     7     4 

Interest  remaining  due  November  1st,  1789,  -  -  136,333  19     0 


Remains  due  on  the  books  of  the  Committee  for  settling 


£1,548,040     7     9 


with  the  late  Continental  Army,  to  the  widows  and 
orphan  children  of  deceased  officers  of  said  army, 
and  to  officers  and  soldiers  for  their  services,  about  20,000     0     0 


N.  B. — By  an  act  of  the  Legislature,  one-third  part  of  the  revenue  of 
excise  is  appropriated  to  pay  the  exigencies  of  government,  and  the  other 
two-third  parts  for  the  payment  of  interest  of  the  notes,  which  pays  about 
one-quarter  part  of  the  interest;  the  other  three  quarters  arc  provided  for. 

Treasury  Office,  Boston,  Oct.  31,  1789. 

ALEXANDER  HODGDON,  Treasurer. 

Compared  with  the  original  in  the  Office  of  the  Secretary  of  the  Treasury. 

WILLIAM  DUER, 

STATE  OF  CONNECTICUT. 

*fl  statement  of  the  public  debt  of  the  State  of  Connecticut,  as  it  stood 

November  1st,  1789. 

NotesissuedtotheConnecticutLine,payable  June  1st,  1782,  £2,334  13  1 1§ 

Do.                                         do.                                         1783,  2,339   13  4 

Do.                                        do.                                         1784,  3,252   12  1 

Do.                                       do.                                        1785,  42,309     6  If 

Do.       •                                  do.                                         1786,  28,189     6  3§ 

Do.                                        do.                                         1787,  28,448     5  6| 

Do.                                       dp.                                       1788,  21,593     0  4i 

Do.                                      do.                                       1789,  20,097     5  7-k 
Do.     dated  February,  1781,  issued  per  act  of  Assembly, 

November,  1780,         -  153,229     8  6i 
Do.     of  various  dates,   issued   per   act  of  Assembly, 

May,  1781,     -.-.,;-             -             -             -  33,947  11  Si 
Notes  dated  June  1st,  1781,    issued  per  act  of  Assem- 
bly, for  remounting  dragoons,  -             -   •  1,932     S  0 
Do.     of  various   dates,    issued   per  act  of  Assembly, 

May,  1783,     -             -             -             ■_             -  41,841      6  If 

Do.     issuedperact  of  May,  1789,  for  old  notes  reloaned,  180,890     l  0 


560,404   IS     H 


3S  REPORTS  OF  THE  [1790. 

Notes  issued  per  particular  acts  of  Assembly,  payable  out 

of  the  civil  list  funds,  •    -  .  -  -     £2,856  11     4 

Certificates  for  interest  &c,  issued  on  the  State  debt,  up  to 
February  1st,  1789,  and  remaining  unpaid  November 
1st,  1789,         ------      19,140     3     9| 

Balance  of  orders  unpaid,  drawn  by  Oliver  Wolcott,  Esq. 

payable  out  of  the  1*.  tax,  granted  in  January,  1783,     -  692     8  10 

Balance  of  State  bills  which  were  emitted  in  March,  June, 
and  July,  1780,  with  the  interest  at  5  per  cent.,  to  1st 
March,  1785,  estimated  at        -  -  -  -      24,948     9     1 

There  are  a  number  of  pay  table  orders  drawn  on  former  taxes,  the  amount, 
supposed  not  great,  cannot  be  ascertained. 

There  is  also_outstanding  a  sum  of  old  emissions  of  paper,  issued  before 
the  war — the  amount  not  known. 

Account  of  Loan  Office  and  Final  Settlement  certificates  in  the  Treasury 
of  the  State  of  Connecticut, 

Loan  Office  certificates       -  -  -  -  -     £    442  19     7 

Final  Settlement  certificates  -  -  2,151   17     1 


£2,594  16     8 


Amount  of  interest  certificates  that  were  issued  upon  the 
evidence  of  the  United  States  debt,  received  by  the  Trea- 
surer of  the  State  of  Connecticut,  for  taxes  and  impost  du- 
ties, and  delivered  to  William  Imlay,  Esq.  Continental 
Loan  Officer,  from  January  9th,  1786,  to  November  1st, 
17S9,     -  -  -  -  -  -  £33,996   IS 


Compared  with  the  original  in  the  Office  of  the  Secretary  of  the  Treasury. 

*9  statement  of  the  funds  provided  for  the  payment  of  the  principal  and 
interest  of  the  public  debt  of  the  State  of  Connecticut. 

Balances  of  taxes  laid  for  the  payment  of  interest  on  the  State  debt,  and  the 
first  three  classes  of  army  notes,  as  appears  from  the  Treasury  books,  No- 
vember 1st,  1789,  being  the  balance  of  fifteen  taxes,  including  abatements, 
collecting  fees,  &c.  -  -  -  -  £40,489  14  10 

Balance  of  excise  and  impost  bonds  payable,  including  col- 
lecting fees,  &c.  ----_        9,070  15     2 

A  tax  of  fourpence  on  the  pound,  laid  on  the  list,  1788, 
amounting  to  £1,462,860  10  11,  for  the  payment  of  in- 
terest on  the  State  debt,  and  the  balance  of  three  first 
classes  of  the  State  notes;  the  nett  avails  estimated  at      -      20,266   14     4 

A  tax  of  eightpence  on  the  pound,  on  the  same  list,  laid  for 

the  payment  of  the  balance  of  State  bills,  orders  on  2*.  6d. 

and  Is.  taxes,  and  part  of  the  principal  of  the  State  debt; 

the  nett  avails  estimated  at  -  40,533     S     8 

Excise  for  the  payment  of  interest  on  the  State  debt,  &c. 

estimated  at        -  t  -  -  -  -       5,000     0     0 


1790.] 


SECRETARY  OF  THE  TREASURY. 


39 


13 

6 
5 


Interest  to  Jan. 
1st,  1790. 

£    78  14  5 


The  first  article  in  the  above  statement  of  funds,  will,  probably,  upon  set- 
tlement of  those  old  taxes,  fall  greatly  short  of  the  sum  set  down;  to  say  how 
much  is  merely  conjectural.  There  will  also  be  a  loss  upon  the  excise  and 
impost  bonds.     The  excise  for  the  current  year  is  very  uncertain. 

Comptboller's  Office,  1st  December,  1789. 

RALPH  POMEROY, 

Comptroller. 

STATE  OF  NEW  YORK. 
A  statement  of  the  debt  of  the  State  of  New  York. 

The  following  species  of  certificates,  &c.  have  been  issued  by  the  State, 

and  are  still  unredeemed,  viz: 

Principal  sum, 
specie  value. 

Certificates  for  money  loaned  pursuant  to.  re- 
solutions of  the  4th  day  of  April,  1778,     £111 

For  ditto,    pursuant   to  a  law  of  the  30th 

June,  1780,  ..-741 

For  horses  purchased  in  the  year  1 780,  904 

For  depreciation  of  pay  to  the  army,  da-    • 
ted  31st  July,  1780  -  -        54,520 

For  pay  of  the  year  1781,  to  ditto,  dated 

1st  January,  1782  -  -        17,972 

For  pensions  to  widows  of  military  officers   8,104 

For  pay  of  levies,  militia,  &c.  &c.  42,871 

For  other  certificates  received  on  loan,  pur- 
suant to  a  law  18th  April,  1786         -      523,848 

Four-fifths  of  the  interest  due  on  those  re- 
ceived on  loan        ...      105,669 

For  claims  on  forfeited  estates  -        25,897 

Bills  of  credit  called  new  emission,  emitted 
pursuant  to  a  law  passed  the  30th  June, 
1780,  bearing  interest 

Ditto,  emitted  pursuant  to  resolutions  of 
Congress  and  Convention  of  this  State, 
reduced  to  specie  value 


422 
515 


10 

8 


1     7 


25,669  17  4 


6  9 

8,626  14  0 

18  2 

3,647  4  2 

43 

18,220  5  3. 

5     1 


10 


144,058     5  4 


3,884  12 


3,612   16     0 


1,174 


1,047     0     0 


£785,300  14     7  £206,297  15  O 


There  are  large  demands  against  forfeited  estates  unli- 
quidated, and  others  liquidated,  for  which  no  certificates 
have  yet  issued,    to   the  amount  of  -  £41,017  12  5, 

There  are  no  funds  especially  provided  for  redeeming 
the  aforesaid  certificates,  except  the  following,  viz: 

The  arrears  of  old  taxes  may  probably  produce  about        10,000     0     0 
Quitrents  about  -  -  -  20,000     0     0 

Fifteen  townships  of  new  lands,  of  375,000  acres,  ordered  to  be  sold  (by 
a  law  passed  25th  February,  1789,)  and  are  now  surveying. 

GERARD  BANCKER, 
Treasurer  of  the  State  of  New  York. 
New  York,  November  30th,  1789. 

Compared  with  the  original  in  the  Office  of  the  Secretary  of  the  Treasury. 


40  REPORTS  OF  THE  [1790, 


Jin  account  of  Continental  Securities  now  in  the  Treasury  of  the  State 

of  New  York. 

Principal.    »  Interest  Jan.  1st, 

1790. 

Certificates  issued  by  William  Barber      £352,471   13     1  £105,741     9  11 
pitto         do       by  Loan  Offices  in  this 

State  -  277,448   16     4         83,234  12   11 

Ditto         do       by  John  Pierce,  Burrall 
Penning,  Bindon  and 

Fox  -  299,614     4     5        89,884     5     4 

Interest  facilities  -  -  2,502  14     8 


£932,037     8     6  £278,S60     8     2 


Of  the  above-mentioned  Loan  Office  and  Barber's  certificates,  the  sum  of 
£470,649  17  6,  was  received  in  on  loan  by  the  State,  in  1786,  and  one- 
fifth  of  the  interest  that  was  due  thereon  to  the  31st  December,  1784,  then 
paid,  and  certificates  for  the  remaining  four-fifths  issued,  payable  in  one 
year,  of  which  certificates  threerfourths  remain  unredeemed,  as  represented 
in  the  former  part  of  this  statement. 

GERARD  BANCKER, 
Treasurer  of  the  State  of  New  York. 

New  York,  November  &0th,  1789. 

Compared  with  the  original  in  the  Office  of  the  Secretary  of  the  Treasury. 

Jin  account  of  Certificates  due  from  the  United  States  to  the  inhabit- 
ants of  the  State  of  New  Jersey,  which  draw  interest  at  the  Trea- 
sury. 

1st.  Continental  Loan  Office  certificates  £420,511  0  10  £25,230  13  3 
2d.   Certificates   issued    by   John  Pierce, 

Cpmm'r,  for  arrears  of  pay,  &c.  147,118  15     2\        8,827     2  6 

8d.   Certificates   by   Benjamin   Tompson, 

Commissioner  -  -  344,237  11     2        20,654     5  0 


£911,867     7     2i  £54,712     0  9 


COMMUTATION. 

4th.  Certificates  issued  by  John  Pierce, 
Commissioner,  and  given  to  the  of- 
ficers of  the  late  Jersey  line,  for  their 
commutation  -  -          £66,899     2     6 


STATE  DEBT. 


1st.  Certificates  given  to  the  officers  and 
soldiers  of  the  late  Jersey  line,  for 
the  depreciation  of  their  pay,  of 
which  there  was  outstanding,  Octo- 
ber 1st,  1786  -  99,526  11     4 


1790.] 


SECRETARY  OF  THE  TREASURY 


2d.  Ditto  given  by  the  Commissioners  in 
the  several  counties  for  militia  pay, 
.  of  which  there  was  outstanding,  Oc- 
tober 1st,  1786  -  -         £  55,365  17     74 

3d.   Certificates  given   by  Silas  Condict, 

Commissioner  -  •    -  121,521     8     7 

4th.  Ditto  given  by  the  Treasurer  and  Au- 
ditor for  demands  against  confisca- 
ted estates        -  -  -  32,020     2     9 

5th.  Ditto  issued  by  the  Auditor  for  mi- 
litia pay  -  821     4     7§ 


309,255     4   11 
Paid  into  the  Treasury  since  Oct.  1786  13,500     0     O 


£295,755     4  11 
Annual  interest  of  State  debt  -  £17,745     6     31 


i  s.  C  Compared  with  the  original  in  the  Office  of  the  Secretary  of  the  Treasury  a 

Abstract  of  the  public  debts  due  from  the  State  of  Virginia. 

On  i  ntpr  C  Army  debt  for  pay  and  depreciation  of  the  officers 
^    t  f    J  and  so^iers  -  £  936,830  7  6 

per  cent.  /  Loan  0ffice  debt  "  "  "  119,382  7  4 

'  C_  Certificates  issued  for  the  paper  money  funded  7,183  2  3 

Balance  due  to  foreign  creditors,  including  interest,  (at  six  per 
cent.)  to  the  1st  of.  January,  1790,  on  £  9,415  0  2,  part 
of  the  said  balance,  for  which  warrants  have  not  been 
drawn  by  the  creditors  -  '40,826  1   1 

JOHN  PENDLETON, 
Auditor  of  Public  Accounts, 

Virginia,  Auditor's  Office,  November  20th,  1789. 

Compared  with  the  original  in  the  Office  of  the  Secretary  of  the  Treasury,. 

The  Auditor  General  reports  the  following  statement  of  the  debt  due 
by  the  State  of  South  Carolina,  viz. 

PRINCIPAL  INDENTS. 

Balance  issued  from  the  Treasury  of  the  State  aforesaid, 
-and  yet  remaining  to  be  issued  on  the  1st  October,  17S9     £  1,069,652  2  4§ 

To  be  cancelled  by 
Bal.  of  bonds  for  confiscated  property  £79,985  10  0i 
Purchases  of  bonds  unsettled  for  12,910  0  0 
Balance  of  amercements     -             -  7,713  4  6 
Balance  for  bonds  for  public  property  355065  10  6 
Balance  of  lands  granted  to  1st  No- 
vember, 17S9                  -             -  42,568  1  71          178,242     6    S 


Balance  still  to  be  cancelled  Sterling  £891,409  15    8| 


4<J  REPORTS  OF  THE  £17900 


SPECIAL  INDENTS. 


Amount  issued  and  to  be  issued        -  £440,368    0    0 

Deduct  for  so  much  received  into  the  Treasury         -  369,042  12    9§ 


Balance  in  circulation,  and  yet  to  be  issued         -         £   71,325    7    2i 


Agreeably  to  a  report  of  the  Committee  of  Ways  and  Means,  the  debts 
due  to  the  State  for  the  arrears  of  taxes,  &c.  are  sufficient  to  cancel  the  above 
balance. 

Foreign  Debt* 

Amount  due  to  sundry  persons  -  £  93,244  17    4 

Balance  of  interest  due  1st  January,  1789        29,558    4  11^ 
Deduct  for  so  much  paid  J.  S.  Cripps, 

agent         -~     -  4,949    5    4i 

Balance  paid  to  such  creditors  as 

were  here,  or  their  attorneys  2,043  16  10     6,993    2    2\     22,565    2    9 


Principal  and  balance  due  1st  January,  1789         -         £115,810    0    1 


Funds  appropriated  by  the  Legislature. 

Out  of  the  taxes  payable  1st  April,  1790        -  -         £  10,000     0     0 

Interest  on  the  paper  medium  to  1st  May,  1791  -  12,750     0     0 

Balance  of  bonds  given  for  confiscated  property,  payable 

in  specie  _____  1,610  17     3i 

The  sums  due,  and  that  shall  become  due,  for  amerce- 
ments, in  specie  -  -  -  -  8,371166 

Balance  of  bonds  given  for  duties  payable  by  instalments         6,240  14     3 

Bonds  for  duties  due  prior  to  1st  January,  1788,  not  in- 
stalled •     -  -  -  -  -  -  233     3     4| 

A  tax  of  a  quarter  of  a  dollar  per  head,  per  annum,  on  all 
negroes,  mustizoes,  and  mulattoes,  for  ten  years,  from 
February,  1791,  the  number  computed  to  be  about 
100,000,  which  will  amount  to      -  -  -  58,333     6     8 

Sterling         -         £  97,539  18     0§ 

Auditor's  Office,  Charleston,  30th  Nov.  1789. 

J.  McCALL,  Treasure?-. 
Compared  with  the  original  in  the  Office  of  the  Secretary  of  the  Treasury 


1790.] 


SECRETARY  OF  THE  TREASURY. 


43 


SCHEDULE  F. 


TABLE  showing  the  annuity  which  a  person  of  a  given  age  would  6c 
entitled  to  during  life,  from  the  time  he  should  arrive  at  a  given  age, 
upon  the  present  payment  of  a  hundred  dollars,  computing  interest 
at  four  per  cent. 


o 

S3  . 

-t->  c 

S3 

4) 

0) 

43  S 

Is  o- 
< 

<u  *d 

43  « 
60 

Annuity. 

a   . 

43  <U 
£~ 
4> 

ba 

< 

Annuity. 

(3  , 

4) 
bo 

< 

Annuity. 

&0 

< 

Annuity* 

1 

21 

23.453 

31 

42.625 

41 

84.522 

50 

174.11 

2 

22 

20.376 

32 

37.365 

42 

74.936 

50 

143.14 

3 

23 

19.415 

33 

35.775 

43 

72.440 

50 

128.46 

4 

24 

18.826 

34 

34.970 

44 

71-697 

50 

117.64 

5 

25 

18.457 

35 

34.660 

45 

71-840 

50 

108.95 

i 

6 

26 

18.280 

36 

34.619 

46 

72.584 

50 

101.60 

| 

7 

27 

18.188 

37 

34.767 

47 

73.752 

50 

95.210 

i 

8 

28 

18.258 

38 

35.235 

48 

75.720 

50 

89.971 

; 

9 

29 

18.383 

39 

35830 

49 

78.025 

50 

85.238 

10 

30 

18.617 

40 

37.006 

50 

81.960 

11 

21 

10.346 

31 

18.803 

41 

37.286 

50 

75.500 

12 

22 

10.414 

32 

19.072 

42 

38-162 

50 

73.058 

13 

23 

10.519 

33 

19.382 

43 

39.249 

50 

70.246 

14 

24 

10.608 

34 

19.704 

44 

40-493 

50 

66.279 

15 

25 

10.727 

35 

20.088 

45 

41.638 

50 

63.151 

16 

26 

10.818 

36 

20.489 

46 

42-957 

50 

60.129 

17 

27 

10.939 

37 

20.911 

47 

44-358 

50 

57.258 

18 

28 

11.065 

38 

21.354 

48 

45-888 

50 

54.520 

19 

29 

11.195 

39 

21.821 

49 

47-519 

50 

51.907 

20 

30 

11.352 

40 

22.313 

50 

49-415 

21 

31 

11.515 

41 

22.836 

50 

47-038 

22 

32 

11.687 

42 

23.386 

50 

44-770 

23 

33 

11.846 

43 

23.987 

50 

42-534 

24 

34 

12.028 

44 

24.719 

50 

40-460 

"25 

35 

12.253 

45 

25.396 

50 

38-510 

26 

36 

12.462 

46 

26.128 

50 

36-572 

, 

27 

37 

12.682 

47 

26.902 

50 

34-726 

28 

38 

12.913 

48 

27.749 

50 

32-967 

29 

39 

13.155 

49 

28.647  j 

50 

31-329 

30 

40 

13.385 

i 

50 

29-643 

31 

41 

13.629 

50 

28-073 

32 

42 

13.884 

50 

26-580  ! 

33 

43 

14.190 

50 

25161  j 

34 

44 

14.547 

50 

23-812  1 

35 

45 

14.827 

50 

22-483 

36 

46 

15.157 

50 

21.217 

37 

47 

15.512 

1 

50 

20-023 

38 

48 

15.896 

i 

50 

18.886  I 

39 

49 

16.301 

50 

17.806 

■ 

40 

50 

16.783 

i 

j 

j 

44 


REPORTS  OF  THE 


[1790. 


SCHEDULE  G. 

TABLE  showing  luhat  annuity  would  be  enjoyed  by  the  surviver  of 
any  two  persons,  of  certain  ages,  for  the  remainder  of  life,  after  the 
determination  of  the  life  in  expectation,  upon  the  present  payment  of 
one  hundred  dollars,  computing  interest  at  four  per  cent,  per  annum, 
and  the  duration  of  life  according  to  Dr.  Halley's  tables. 


09 

+3 

+s 

co 

<u 

c 

t> 

CU 

ha 

-ij 

ttf 

*i 

bo 

bo 

o 

2 

Annuity 

c 

s 

Q 

Gfl 

u 

2 

Annuity 

s 

o 

4> 
2 

Annuity 

B 
S 
o 

OB 

4) 

2 

Annuity 

>. 

"3 

of 

S» 

13 

of 

>» 

13 

of 

>> 

13 

of 

Surviver. 

<o 

J! 

Surviver. 

4> 

Surviver. 

4) 

■£5 

<u 

'j3 

Surviver. 

*3 

+J 

+J 

Cw 

u- 

«*- 

In 

Cm 

«+- 

Cm 

o 

o 

c 

O 

o 

O 

O 

O 

o 

y 

o 

4) 

o 

1) 

CD 

<D 

bo 

60 

br 

to 

bo 

&o 

bo 

bo 

< 

< 

< 

< 

< 

< 

«i 

O 

10 

28.248 

20 

28.169 

30 

28.555 

45 

30.620 

15 

26.392 

25 

26.041 

35 

26.001 

50 

27.005 

20 

24.545 

30 

23.923 

40 

23.496 

55 

23.375 

25 

22.716 

35 

21.753 

45 

21.061 

45 

60 

20.040 

30 

20.920 

40 

19.825 

30 

50 

18.730 

65 

16.957 

35 

19-168 

20 

45 

17.876 

55 

16.529 

70 

14.240 

10 

40 

45 

17.464 
15.847 

50 
55 

16.018 

60 
65 

14.484 
12.600 

14*261 

50 

32.164 

50 

14,263 

60 

12.620 

70 

10.894 

55 

27-731 

55 
60 

12.782 
11.237 

65 
70 

11.100 
9-707 

50 

60 
65 

23.513 
19.662 

35 

28.993 

65 

70 

10.099 
8.905 

40 
45 
50 

26.164 
23.381 
20.702 

70 

16.257 

25 
30 

27.816 
25.556 

55 

34.286 

15 

28.169 

35 

23.331 

35 

55 

18.172 

60 

28.843 

20 

26-198 

40 

21.159 

60 

15.820 

55 

65 

23.742 

25 

24.219 

45 

19.047 

65 

13.666 

70 

19.175 

in 

22-276 
20.376 
18.528 

25 

50 
55 
60 

17.030 
15.117 

70 

11.724 

in 

60 
65 

37.509 
30.423 

40 

13.331 

40 

29.673 

60 

15 

45 

16.750 

65 

11.689 

45 

26.469 

70 

24.044 

50 

15.053 

70 

10.173 

50 

23.337 

55 

12.968 

40 

55 

20.354 

65 

65 

42.481 

60 

11.948 

60 

17.604 

70 

32.679 

65 

10.553 

65 

15.060 

70 

9.270 

70 

12.799 

70 

70 

50.994 

To  find  the  annuity  upon  the  survivership  of  the  youngest  of  any  two 
lives  expressed  in  this  table,  look  for  the  respective  ages  under  their  respec- 
tive heads,  and  opposite  the  number  which  corresponds  with  the  age  of  the 
eldest  will  be  seen  the  annuity  required. 


1790.] 


SECRETARY  OF  THE  TREASURY. 
SCHEDULE  H. 


4h 


Table  for  a  Tontine  of  six  Classes,  the  number  of  lives  in  each  Class  be- 
ing indefinite,  calculated  on  a  payment  of  two  hundred  dollars  by  each 
subscriber,  and  at  a  rate  of  interest  of  four  per  cent.  The  computa- 
tion on  the  best  life  in  each  Class,  and  on  the  supposition  that  the  sub- 
scribers to  each  class  will  not  be  less  than  the  respective  numbers  spe- 
cified in  the  first  column. 


s 

Annuity  dividends  at  successive  periods  during1  the  probable  continuance 

CO 

of  life. 

> 

Ages. 

Whilst 

At  the 

At  the 

At  the 

At  the     At  the 

At  the 

At  the 

all  are  in 

expira- 

expira- 

expira- 

expira- 

expira- 

expira- 

expira- 

=5 « 

5  rt 
1  " 

life. 

tion  of 

tion  of 

tion  of 

tion  of 

tion  of 

tion  of 

tion  of 

10  years. 

20  years. 

30  years. 

40  years. 

50  years. 

60  years. 

70  years. 

75 

Ito20 

8.426 

9.722 

11.490 

14.042 

18.054 

25.278 

42.130 

126.390 

64 

21  to  30 

8.676 

10.272 

12.606 

16.314 

23.110 

39.618 

138.666 

54 

31  to  40 

9-046 

11.102 

14.366 

20.354 

34.890 

122.282 

44 

41  to  50 

9.650 

12.488 

17.608 

30.328 

106.150 

34 

51  to  60 

10.714 

15.178 

26.020 

91-068 

24 

61  to  70 

12.802 

20.518 

71.802 

1 

This  table,  which  is  calculated  on  so  small  a  number  of  persons,  will  serve 
to  show  the  greatness  of  the  advantage  to  fortunate  survivers,  in  case  of  a 
numerous  subscription. 


SCHEDULE  I. 

General  Estimate  for  the  services  of  the  current  year. 
Civil  List,  as  per    No.  1  -        .     -  $254,892  73 

War  Department,  No.  2  -  155,537  72 

Military  Pensions,  No.  3  96,979  72 


507,410  17 


With  an  eye  to  the  necessary  provisions  for  the  Foreign  Department, 
and  to  other  arrangements  which  may  be  found  requisite,  it  appeared  ad- 
viseable  to  state  in  the  report,  to  which  this  is  annexed,  a  sum  of  six  hun- 
dred thousand  dollars  for  the  current  service. 

Treasury  Department,  Jan.  5th,  1790. 

No.  1. 

Estimate  of  the  expenditure  for  the  Civil  List  of  the  United  States,  on 
the  present  establishment,  for  the  year  1 790. 

For  the  compensation  to  the  President  of  the  United  States  $  25,000  00 

That  of  the  Vice-President    -             -             -             -             -  5,000  00 

Compensation  to  the  Chief  Justice      -  4,000  00 

Do,          to  each  of  the  five  Associate  Judges,  $3,500  each  17,500  00 


4b  REPORTS  OF  THE  [1790. 


To  the  Judges  of  the  following 

Districts,  viz 

District  of  Maine 

- 

- 

$  1,000  00 

New  Hampshire 

- 

- 

1,000  00 

Massachusetts 

- 

- 

1,200  00 

Connecticut 

- 

- 

1,000  00 

New  York 

- 

- 

1,500  00 

New  Jersey 

- 

- 

1,000  00 

Pennsylvania 

- 

- 

1,600  00 

Delaware 

- 

- 

800  00 

Maryland 

- 

- 

1,500  00 

Virginia 

- 

1,800  00 

Kentucky 

- 

- 

1,000  00 

South  Carolina 

- 

1,800  00 

Georgia 

- 

- 

1,500  00 

Attorney  General     - 

- 

- 

1,500  00 

Compensation  to  the  members  of  Congress,  es- 
timating the  attendance  of  the  whole  number 
for  six  months,  viz: 

Speaker  of  the  House  of  Representatives,  at 

twelve  dollars  per  day  -  -         2,190  00 

Eighty  members,  at  six  dollars  per  day      -       87,600  00 
Travelling  expenses  computed       -  -       15,000  00 


69,700  00 


To  the  Secretary  of  the  Senate,  one  year's  salary         1,500  00 
Additional  allowance,  estimated  for  six  months,  at 

two  dollars  per  day  =  365  00 


-104,790  00 


Principal  clerk  to  the  Secretary  of  the  Senate,  for 

the  same  time,  at  three  dollars  per  day          -  547  50 

Engrossing  clerk  to  the  Secretary  of  the  Senate, 

estimated  for  same  time,  at  two  dollars  per  day  365  00 

Chaplain  to  the  Senate,  estimated  for  six  months, 

at  five  hundred  dollars  per  annum     -  -  250  00 

Compensation  to  the  door-keeper  of  the  Senate  for 

the  same  time,  at  three  dollars  per  day  -  547  50 

Messenger  to  the  Senate,  for  the  same  time,  at  two 

dollars  per  day         -  •  -  -  -  365  00 

Clerk  of  the  House  of  Representatives, 

for  one  year's  salary  -  -  1,500  00 

Additional  allowance  for  six  months,  at 

two  dollars  per  day  -  -      365  00 


1,865  00 


1,865  00 

Principal  clerk  in  the  office  of  do.  estimated  for 

same  time,  at  three  dollars  per  day    -  -  547  50 

Engrossing  clerk  for  same  time,  estimated  at  two 

dollars  per  day  -  -  -  -  365  00 

Chaplain  to  the  House  of  Representatives,  estima- 
ted for  same  time,  at  500  dollars  per  annum  -         250  00 

Sergeant  at  Arms,  estimated  for  same  time,  at  four 

dollars  per  day      "   -  730  00 


790.] 


SECRETARY  OF  THE  TREASURY. 


47 


Doorkeeper  for  same  time,  at  three  dollars  per  day 
Assistant  doorkeeper,  for  do.  at  two  dollars  per  day 


Treasury  Department 

Secretary  of  the  Treasury 

Assistant  of  the  Secretary  of  the  Treasury 

Five  clerks,  at  500  dollars  per  annum  each 

Messenger  and  office-keeper     - 

Comptroller  of  the  Treasury    - 

Principal  clerk  to  do . 

Four  clerks,,  at  $  500  each,     - 

Treasurer 

Principal  clerk  to  do. 

Auditor  of  the  Treasury 

Principal  clerk  to  do.  - 

Twelve  clerks  to  do.  who,  besides  the  current  bu- 
siness under  the  new  government,  has  the  set- 
tlement of  the  accounts  which  arose  under  the 
Confederation,  in  the  quartermaster,  commissa- 
ry, clothing,  hospital,  and  marine  departments, 
and  ordnance  stores,  and  also  the  accounts  of  the 
secret  and  commercial  committees  of  Congress, 
at  500  dollars  each  - 

Register  of  the  Treasury  -.'."'.- 

One  clerk  on  the  books  of  the  public  creditors,  call- 
ed funded  debt  at  the  Treasury,  transfers,  &c. 

One  clerk  in  the  office  of  the  Register,  employed 
in  keeping  the  accounts  of  interest  arising  on 
the  domestic  debt     - 

One  do.  on  the  principal  books  of  the  Treasury  in 
journalizing  and  posting  into  the  Ledger 

One  clerk  in  copying  fair  statements  of  the  public 
accounts  and  other  transcripts,  as  required,  from 
the  Treasury  books    ■  - 

One  do.  in  keeping  the  accounts  of  the  registers, 
signed  and  sealed,  &c.  for  ships,  transmitted  to  the 
Collectors  of  the  Customs  at  the  several  ports; 
filing  duplicates  of  registers  issued  by  the  Col- 
lectors; keeping  the  accounts  of  the  transfers  of 
vessels,  and  other  business  of  record  arising  from 
the  act  for  registering  of  vessels,  regulating  the 
coasting  trade,  and  other  purposes  therein  men- 
tioned 

Two  do.  on  the  old  accounts  of  the  Treasury,  and 
books  and  accounts  of  the  thirteen  late  State 
Commissioners,  at  five  hundred  dollars  each 

Messenger  and  office-keeper  to  the  Comptroller, 
Auditor's  and  Register's  office 


'   $547 

50 

365 

00 

or  74 K   on 

fm 

8  183,100  00 

$3,500 

00 

1,500 

00 

2,500 

00 

150 

00 

2,000 

00 

800 

00 

2,000 

00 

2,000 

00 

600 

00 

1,500 

00 

600 

00 

6,000  00 
1,250  00 

500  00 


500  00 
500  00 

500  00 


-208,950  00 


500  00 


1,000  00 


150  00 


-     2,150  00 


4S                                       REPORTS  OF  THE  [1790. 

Department  of  State. 

Secretary  of  that  Department    -  83,500  00 

Chief  clerk       -----  800  00 

Three  clerks  at  500  dollars  each                         -  1,500  00 

Messenger  and  office-keeper                                -  150  00 


3,000 

00 

600 

00 

1,000 

00 

150 

00 

Depart 'me tit  of  TVar 
Secretary  of  that  Department    - 
Chief  clerk       - 

Two  clerks  at  500  dollars  each 
Messenger  and  office-keeper    - 

Governmejit  of  the  TVestem  Territory. 
The  Governor,  for  his  salary  as  such,  and  for  dis- 
charging the  duties  of  Superintendent  of  In- 
dian Affairs  in  the  Northern  Department       -      §2,000  00 
The  Secretary  of  the  Western  Territory  -  750  00 

The  three  Judges,  at  $  S00  each  -*  -         2,400  00 


S5,950  00 


4,750  00 


Officers  employed  to  settle  the  accounts  between 

the  United  States  and  individual  States 
Three  Commissioners  of  the  General  Board,  at  two 

thousand  two  hundred  and  fifty  dollars  per  annum 
Chief  clerk  - 

Four  clerks,  at  four  hundred  dollars  each, 
Messenger  and  office-keeper        - 
Paymaster  General,  and  Commissioner  of  Army 

Accounts         ------ 

Eight  clerks,  at  500  dollars  each, 
One  clerk  at  four  hundred  dollars 
One  clerk  at  four  hundred  and  fifty  dollars 

Pensions  granted  by  the  late  government. 

Isaac  Van  Vert,  ~)  A  pension  of  $  200  per  annum 
John  Paulding,    >      to  each,  pursuant  to  an  act  of 
David  Williams,  )      Congress  of  3d  Nov.  1780,         600  00 
Dominique  L'Eglize,  per  act  of  Sth  August,  1782,         120  00 
Joseph  Traversie,  per  do.  -         120  00 

Youngest  children  of  the  late  Major  General  War- 
ren, per  act  of  1st  July,  17S0,  -   .         -         450  00 
Eldest  son  of  Maj.  Gen.  Warren,  per  act  of  Sth 

April,  1777,  estimated  at  600  00 

Youngest  son  of   Gen.   Mercer,  per  act  of  Sth 

April,  1777,  estimated  at  -  700  00 

James  McKenzie,  ^  per  act  of  10th  Sept'r,  1783, 
Joseph  Brussels,  V  entitled  to  a  pension  of  $40 
John  Jordan,  )      each  per  annum     - 

Elizabeth  Bergen,  per  act  21st  August,  1781, 
Joseph  De  Beauleau,  per  act  5th  August,  1782,  - 
Richard  Gridley,  per  acts  17th  November,  1775, 

and  26th  February,  1781, 
Lieut  Col.  Touzard,  per  act  27th  October,  1778,  - 


5,150  00 


6,750  00 

600  00 

1,600  00 

150  00 

1,250  00 

4.000  00 

400  00 

450  00 

15.200  00 

120  00 

53  33 

100  00 

444  40 

360  00 

3.667  7? 

1790.]  SECRETARY  OP  TBB  TREASURE.  4^ 

JFbr  incidental  and  contingent  expenses  relative  to  the  Civil 
List  establishment. 

Under  this  head  are  comprehended  firewood, stationary,  to- 
gether with  printing  work,  and  all  other  contingent  expenses 
for  the  two  Houses  of  Congress,  rent  and  office  expenses  of  the 
several  Departments,  viz:  Treasury,  State,  War,  and  of  the 
General  Board  of  Commissioners,  and  Paymaster  General. 


Congress  estimated  at      - 

- 

5  5,000  00 

TREASURY  DEPARTMENT, 

viz: 

Rent       ----- 

- 

500 

00 

Contingencies  of  the  Secretary's  office 

- 

906 

00 

Comptroller's 

- 

400 

00 

Contingencies  of  the  Auditor's     - 

- 

200 

00 

Register's    - 

- 

200 

00 

Treasurer's 

- 

200 

00 

2,000  00 

Contingencies  of  the  "War  Department 

- 

600 

00 

Department  of  State, 

- 

500 

00 

Board  of  Commissioners 

- 

500 

00 

Paymaster  and  Commission- 

er of  Army  Accounts 

- 

425 

00 

2,025  00 

%  254.802   75 

lias  estimate  corresponds  with  the  existing  provisions;  but  it  will  probably 
receive  additions  from  others  in  the  course  of  the  session.  In  particular,  it  will 
be  observed,  that  there  is  no  article  respecting  the  salaries  of  foreign  minis- 
ters, their  allowances  not  having  been  regulated  by  law.  Neither  does  the 
estimate  include  those  objects  which  remain  to  be  provided  for,  in  conse- 
quence of  some  deficiency  in  the  estimate  for  the  services  of  last  year,  and 
also  from  certain  demands  on  the  Treasury,  founded  on  acts  of  the  late  go- 
vernment, which  require  an  appropriation  by  Congress  previous  to  their  be- 
ing discharged.  These  will  form  an  estimate  by  themselves,  under  the  Y 
of  Contingencies. 

Register's  Office,  5th  January,  1790. 

JOSEPH  NOURSE,  Register 

No.  2. 

Estimate  of  Moneys  requisite  for  the  Department  of  War,  for  the  year 

1790. 

infantry. 

1  Brigadier  General,  with  the  pay  of  Lieuter. 

Colonel  Commandant,  for  12  months,  at  %  50  -  $  (JOG 

2  Majors,  for  12  months,  at  45  dollars.  -  1,086 
7  Captains,  35  -  2,940 
7  Lieutenants.                         30                            '  -  2,520 

3  Ensigns,  20  1,920 
1  Paymastei                          10  120 


50 


REPORTS  OF  THE 


1790. 


1  Adjutant,  10 

1  Quartermaster,  10 

1  Surgeon,  45 

4  Surgeon's  Mates,  30 

28  Sergeants,  6 

28  Corporals,  5 

14  Musicians,  5 

490  Privates,  4 


$  120 

120 

540 

1,440 

2,016 

1,680 

S40 

23,520 


39,456  00 


ARTILLERY. 


1  Major,  for  12  months,  at  45  dollars 

4  Captains,  35 

8  Lieutenants,  —  30 

1  Surgeon's  Mate,  30 

16  Sergeants,  6_ 

16  Corporals,  5 

8  Musicians,  5 

240  Matrosses,  4 


540 
1,680 

2,880 

360 

1,152 

960 

480 

11,520 


Brigadier  General,  12  months, 
Three  Majors,  do 

Eleven  Captains,         do 
Twenty-three  subalterns,  do 
One  Surgeon,  do 

Five  Surgeon's  Mates,       do 


Subsistence. 

at  48  dollars 
at  20     do 
at  12 
at    8 
at  16 
at    8 


do 
do 
do 
do 


576  00 
720  00 
1,584  00 
2,208  00 
192  00 
480  00 


Hations. 


For  840  non-commissioned  officers  and  privates, 
one  ration  per  day,  each,  for  365  days,  is 
306,600  rations,  at  12  cents  per  ditto, 

Clothing  840  >  g40  guits  at  2g  dollarg  each 

Contingencies  100  3 

Quartermaster's  Department 

Transportation,  including  the  transportation  of 
the  recruits  to  the  frontiers,  the  removal  of 
troops  from  one  station  to  another,  the  transpor- 
tation of  clothing,  ordnance,  and  military  stores 
for  the  troops  on  the  frontiers,  the  necessary 
removal  of  ordnance  and  military  stores,  the 
hire  of  teams  and  packhorses,  the  purchase  of 
tents,  boats,  axes,  camp-kettles,  boards,  fire 
wood,company  books,  stationary  for  the  troops, 
and  all  other  expenses  in  the  Quartermaster's 
Department 

Hospital  Department. 

For  medicines,  instruments,  furniture  and  stores 
for  an  hospital  for  the  frontiers;  also  for  attend- 
ance, when  necessary,  at  West  Point 


36,792  00 
24,440  00 


19.572  00 


5,760  00 


61,232  00 


15,000  00 


1,000  00 


1790.] 


SECRETARY  OF  THE  TREASURY, 


51 


Ordnance  Department 

For  salaries  for  the  store-keepers  at  the  several 

deposites,  viz: 
West  Point,  } 

Virginia,       >  3,  at  $40  per  month      $ 
Springfield,  3 
Charlestown,  one  storekeeper,  at  $100 

per  annum  - 

Two  assistants,  at  15  dollars  per  month 
One  storekeeper  at  Philadelphia 
One         do  at  Rhode  Island 

One         do  at  Lancaster 

One  storekeeper  atFort  Herkimer,  120 
His  subsistence,  one  dollar  per  week,  52 


1,440  00 


100  00 

360  00 

500  00 

96  00 

96  00 

172  00 


Rents  of  buildings  for  deposites: 

Philadelphia  -  -  -,  752  66 

Virginia  -  -  -  350  00 

West  Point  -  -  400  00 

Laborers  at  the  several  deposites 

Eight  artificers  at  the  posts  on  the  frontiers,  in- 
cluding armorers,  at  5  dollars  per  month 

Coopers,  armorers,  and  carpenters  employed  oc- 
casionally at  the  several  arsenals  r 

The  expense  of  materials  and  constructing  twenty 
new  carriages  for  cannon  and  howitzers 


%  2,764  00 


1,502  66 
400  00 


480  00 


500  00 


2,000  00 


Buildings  for  arsenals  and  magazines  are  highly  requisite  in 
the  southern  and  middle  departments,  for  which,  particu- 
larly, estimates  will  be  formed. 

Contingencies  of  the  War  Department,  viz: 

For  maps,  hiring  expresses,  allowance  to  officers  for  extra 
expenses,  printing,  loss  of  stores  of  all  kinds,  advertising 
and  apprehending  deserters  - 

Contingencies  for  the  War  Office,  viz: 

Office  rent,  wood,  stationary,  desks,  book-cases,  sweeping,  &c. 

Subsistence  due   the  officers  of  Colonel  Marinus 

Willett's  regiment,  1782  -  -  -        786  06 

Pay  due  to  Lieutenant  Joseph  Wilcox,  paymaster 
to  the  regiment  lately  commanded  by  Colonel 
David  Humphreys       -  -  -  -         315  00 

Pay,  subsistence,  and  forage  due  the  officers  ap- 
pointed by  the  State  of  Rhode  Island,  under  the 
act  of  Congress  of  the  20th  October,  1786         -      1,770  00 


"I 


7,646  66 


3,000  00 


600  00 


Total  amount  as  above 

ft 


2,871  06 
156,137  72 


52  REPORTS  OF  THE  [1790. 

Deduct  contingencies  of  the  War  Office,  office 
rent,  wood,  stationary,  desks,  &c.  as  above,  the 
same  being  included  with  the  salaries  in  the  Ci- 
vil List  estimate  -  -  -  -■    •■  .  $600  00 


.55,537  72 


Summary  of  the  foregoing. 

Pay  of  the  troops               -             -             -  -                         $59,028  00 

Subsistence  of  do               -             -   '     '".-  -             -             42,552  00 

Clothing  of      do               -             -             -  -  ~          '  -             24,440  00 

Quartermaster's  Department         -             -  -                           15,000  00 

Hospital  Department        -             -             -  -             -               1,000  00 

Contingencies~of  the  War  Department      -  3,000  00 

Contingencies  of  the  War  Office   -  600  00 

Arrears  of  pay  and  subsistence  unprovided  for  -             -             2,871  06 

Ordnance  Department         -             -             -  -             -             7,646  66 


8156,137  72. 


War  Office,  December  29,  1789. 

(Signed)  HENRY  KNOX, 

Secretary  for  the  Department  of  War. 

No.  III. 

Estimate  of  the  Annual  Pensions  of  the  Invalids  of  the  United  States, 
viz:   Taken  from  returns  in  the  War  Office,  dated  as  folloivs: 


November  28,  1789. — New  Hampshire, 

$  3,024  00 

December  14,  1789. — Massachusetts, 

11,166 

00 

December     1,  1789. — Connecticut, 

7,296 

00 

December  31,  1789. — New  York, 

15,588 

00 

February      2,1789. — New  Jersey, 

4,357 

06 

December  10,  1789. — Pennsylvania, 

16,506 

00 

For  1787. — Virginia,            - 

9,276 

66 

67,2-13  72 

Conjectural. — No  returns  having  been  received, 

suppose   Rhode   Island  and  Delaware   nearly 

equal  to  New  Hampshire, 

3,170 

00 

' 

Maryland  nearly  equal  to  Connecticut, 

7,000 

00 

North  Carolina,   South    Carolina,   and   Georgia, 

nearly  equal  to  New  Hampshire,  Connecticut, 

and  Virginia,        - 

19,596 

00 

29,766  Ofi 

$96,979  72 

(Signed)  ■■'•  H.  KNOX, 

Secretary  for  the  Department  of  War. 
War  Office,  31st  December,  17S9. 


1790.]  SECRETARY  OF  THE  TREASURY.  53 


SCHEDULE  K. 

Estimate  of  the  probable  product  of  the  funds  proposed  for  funding  the 
debt,  and  providing  for  the  current  service  of  the  United  States,  in- 
cluding the  present  duties  on  imports  and  tonnage. 

Probable  productof  the  duties  on  imports  and  tonnage, 

according  to  the  acts  of  the  last  session    -  -  $1,S00,000 

Including  the  State  of  North  Carolina,  this  estimate 
may  be  said  to  correspond  with  the  statement 
made  by  the  Committee  of  Ways  and  Means, 
during  the  last  session ;  which  statement  the  Se- 
cretary is  inclined  to  think  is  as  near  the  truth 
as  can  be  now  obtained. 

In  the  preceding  estimate  are  comprehended  wines, 

distilled  spirits,  teas  and  coffee,  amounting  to  about       600,000 


Which,  being  deducted,  leaves         §1,200,000 
From  which,  deducting  five  per  cent,  for  expense  of 

collection  -  60,000 


Leaves  nett  product  -  -  $1,140,000 

PROBABLE  PRODUCT  OF  DUTIES  PROPOSED. 

Imported. 

1,000,000  gallons  of  wine,  at  20  cents,  %  200,000 

4,000,000  gallons  of  distilled  spirits,  at  20.  cents,  800,000 

700,000  pounds  Bohea  tea,  at  12  cents,  84,000 

800,000     do.       Souchong  and  other 

black  teas       .  at  20  cents,  160,000 

100,000     do.       green  tea,  average  at  25  cents,  25,000 

1,600,000     do.       coffee,  at    5  cents,  80,000 

Made  in  the  United  States. 

3,500,000  gallons  distilled  spirits,  from  foreign  ma- 
terials, at  1 1  cents  -  385,000 

3,000,000  gallons  distilled  from  materials  of  the 

United  States,  at  9  cents  -  -       270,000 


2,004,000 


Deduct  for  drawbacks  and  expense  of  collection,  15 

percent.  -  300,600 


1,703,400 
$2,843,400 


54  REPORTS  OF  THE  [1790. 


REPORT  ON  A  NATIONAL  BANK. 

Treasury  Department, 

December  13th,  1790. 

In  obedience  to  the  order  of  the  House  of  Representatives,  of  the  ninth 
day  of  August  last,  requiring  the  Secretary  of  the  Treasury  to  pre- 
pare and  report,  on  this  day,  such  further  provision  as  may,  in  his 
opinion,  he-necessary  for  establishing  the  Public  Credit;  the  said 
Secretary  further 

Respectfully  reports: 

That  from  a  conviction  (as  suggested  in  his  report  No.  1,  herewith  pre- 
sented) that  a  National  Bank  is  an  institution  of  primary  importance  to  the 
prosperous  administration  of  the  Finances,  and  would  be  of  the  greatest 
utility  in  the  operations  connected  with  the  support  of  the  Public  Credit, 
his  attention  has  been  drawn  to  devising  the  plan  of  such  an  institution, 
upon  a  scale  which  will  entitle  it  to  the  confidence,  and  be  likely  to  render 
it  equal  to  the  exigencies,  of  the  public. 

Previously  to  entering  upon  the  detail  of  this  plan,  he  entreats  the  indul- 
gence of  the  House,  towards  some  preliminary  reflections  naturally  arising 
out  of  the  subject,  which  he  hopes  will  be  deemed  neither  useless  nor  out 
of  place.  Public  opinion  being  the  ultimate  arbiter  of  every  measure  of 
government,  it  can  scarcely  appear  improper,  in  deference  to  that,  to  accom- 
pany the  origination  of  any  new  proposition  with  explanations,  which  the 
superior  information  of  those  to  whom  it  is  immediately  addressed,  would 
render  superfluous. 

It  is  a  fact,  well  understood,  that  public  banks  have  found  admission  and 
patronage  among  the  principal  and  most  enlightened  commercial  nations. 
They  have  successively  obtained  in  Italy,  Germany,  Holland,  England  and 
France,  as  well  as  in  the  United  States.  And  it  is  a  circumstance  which 
cannot  but  have  considerable  weight,  in  a  candid  estimate  of  their  tendency, 
that,  after  an  experience  of  centuries,  there  exists  not  a  question  about  their 
utility  in  the  countries  in  which  they  have  been  so.  long  established.  Theo- 
rists and  men  of  business  unite  in  the  acknowledgment  of  it. 

Trade  and  industry,  wherever  they  have  been  tried,  have  been  indebted  to 
them  for  important  aid.  And  government  has  been  repeatedly  under  the 
greatest  obligations  to  them  in  dangerous  and  distressing  emergencies.  That 
of  the  United  States,  as  well  in  some  of  the  most  critical  conjunctures  of 
the  late  war,  as  since  the  peace,  has  received  assistance  from  those  estab- 
lished among  us,  with  which  it  could  not  have  dispensed. 

With  this  twofold  evidence  before  us,  it  might  be  expected  that  there 
would  be  a  perfect  union  of  opinions  in  their  favor.  Yet  doubts  have  been 
entertained;  jealousies  and  prejudices  have  circulated;  and  though  the  expe- 
riment is  every  day  dissipating  them,  within  the  spheres  in  which  effects  are 
best  known;  yet  there  are  still  persons  by  whom  they  have  not  been  entirely 
renounced.     To  give  a  full  and  accurate  view  of  the  subject,  would  be  to 


1790.]  SECRETARY  OF  THE  TREASURY.  5$ 

make  a  treatise  of  a  report;  but  there  are  certain  aspects  in  which  it  may  be 
eursorily  exhibited,  which  may  perhaps  conduce  to  a  just  impression  of  its 
.merits.  These  Will  involve  a  comparison  of  the  advantages,  with  the  dis- 
advantages, real  or  supposed,  of  such  institutions. 

The  following  are  among  the  principal  advantages  of  a  Bank: 
First.   The  augmentation  of  the  active  or  productive  capital  of  a  country. 
Gold  and  silver,  where  they  are  employed  merely  as  the  instruments  of  ex- 
change and  alienation,  have  been  not  improperly  denominated  dead  stock; 
but  when  deposited  in  banks,  to  become  the  basis  of  a  paper  circulation, 
which  takes  their  character  and  place,  as  the  signs  or  representatives  of 
value,  they  then  acquire  life,  or,  in  other  words,  an  active  and  productive 
quality.     This  idea,  which  appears  rather  subtile  and  abstract,  in  a  general 
form,  may  be  made  obvious  and  palpable,  by  entering  into  a  few  particulars. 
It  is  evident,  for  instance,  that  the  money  which  a  merchant  keeps  in  his 
chest,  waiting  for  a  favorable  opportunity  to  employ  it,  produces  nothing 
till  that  opportunity  arrives.     But  if,  instead  of  locking  it  up  in  this  manner, 
he  either  deposites  it  in  a  bank,  or  invests  it  in  the  stock  of  a  bank,  it  yields 
a  profit  during  the  interval,   in  which  he  partakes,  or  not,  according  to  the 
choice  he  may  have  made  of  being  a  depositor  or  a  proprietor;  and  when 
any  advantageous  speculation  offers,   in  order,  to  be  able  to  embrace  it,  he 
has  only  to  withdraw  his  money,  if  a  depositor,  or  if  a  proprietor,  to  obtain 
a  loan  from  the  bank,  or  to  dispose  of  his  stock;  an  alternative  seldom  or 
never  attended  with  difficulty,  when  the  affairs  of  the  institution  are  in  a 
prosperous  train.     His  money  thus  deposited  or  invested,  is  a  fund  upon 
which  himself  and  others  can  borrow  to  a  much  larger  amount.     It  is  a  well 
established  fact,  that  banks  in  good  credit  can  circulate  a  far  greater  sum 
than  the  actual  quantum  of  their  capital  in  gold  and  silver.     The  extent  of 
the  possible  excess  seems  indeterminate;  though  it  has  been  conjecturally 
stated  at  the  proportions  of  two  and  three  to  one.     This  faculty  is  produced 
in   various   ways.      First — A  great  proportion  of    the  notes  which   are 
issued  and  pass  current  as  cash,   are  indefinitely  suspended   in  circulation, 
from  the  confidence  which  each  holder  has,  that  he  can  at  any  moment  turn 
them   into  gold  and  silver.     Secondly — Every  loan  which  a  bank  makes, 
is,  in  its  first  shape,  a  credit  given  to  the  borrower  on  its  books,  the  amount 
of  which  it  stands  ready  to  pay,  either  in  its  own  notes,  or  in  gold  or  silver, 
at  his  option.     But,  in  a  great  number  of  cases,  no  actual  payment  is  made 
in  either.     The  borrower  frequently,   by  a  check  or  order,  transfers  his 
credit  to  some  other  person,   to  whom  he  has  a  payment  to  make;  who,  in 
his  turn,  is  as  often  content  with  a  similar  credit,  because  he  is  satisfied  that 
he  can,  whenever  he  pleases,  either  convert  it  into  cash,  or  pass  it  to  some 
other  hand,  as  an  equivalent  for  it.     And  in  this  manner  the  credit  keeps 
circulating,  performing  in  every  stage  the  office  of  money,  till  it  is  extin- 
guished by  a  discount  with  some  person  who  has  a  payment  to  make  to  the 
bank,  to  an  equal  or  greater  amount.     Thus  large  sums  are  lent  and  paid, 
frequently  through  a  variety  of  hands,  without  the  intervention  of  a  single 
piece  of  coin.      Thirdly — There  is  always  a  large  quantity  of  gold  and 
silver  in  the  repositories  of  the  bank,  besides  its  own  stock,  which  is  placed 
there  with  a  view  partly  to  its  safe  keeping,  and  partly  to  the  accommodation 
of  an  institution  which  is  itself  a  source  of  general  accommodation.     These 
deposites  are  of  immense  consequence  in  the  operations  of  a  banV.    Though 
liable  to  be  re-drawn  at  any  moment,  experience  proves,  that  the  money  so 
much  oftener  changes  proprietors  than  place,  and  that  what  is  drawn  out  is 


56  REPORTS  OF  THE  [1790, 

generally  so  speedily  replaced,  as  to  authorize  the  counting  upon  the  sums 
deposited,  as  an  effective  fund;  which,  concurring  with  the  stock  of  the 
bank,  enables  it  to  extend  its  loans,  and  to  answer  all  the  demands  for  coin, 
whether  in  consequence  of  those  loans,  or  arising  from  the  occasional  return 
of  its  notes. 

These  different  circumstances  explain  the  manner  in  which  the  ability  of 
a  bank  to  circulate  a  greater  sum  than  its  actual  capital  in  coin  is  acquired. 
This,  however,  must  be  gradual,  and  must  be  preceded  by  a  firm  establish- 
ment of  confidence;  a  confidence  which  may  be  bestowed  on  the  most  ra- 
tional grounds,  since  the  excess  in  question  will  always  be  bettomed  on  good 
security  of  one  kind  or  another.  This,  every  well  conducted  bank  carefully 
requires,  before  it  will  consent  to  advance  either  its  money  or  its  credit; 
and  where  there  is  an  auxiliary  capital,  (as  will  be  the  case  in  the  plan  here- 
after submitted,)  which,  together  with  the  capital  in  coin,  define  the  bounda- 
ry that  shall  not  be  exceeded  by  the  engagements  of  the  bank,  the  security 
may,  consistently  with  all  the  maxims  of  a  reasonable  circumspection,  be 
regarded  as  complete. 

The  same  circumstances  illustrate  the  truth  of  the  position,  that  it  is  one 
of  the  properties  of  banks  to  increase  the  active  capital  of  a  country.  This, 
in  other  words,  is  the  sum  of  them — the  money  of  one  individual,  while  he 
is  waiting  for  an  opportunity  to  employ  it,  by  being  either  deposited  in  the 
bank  for  safe  keeping,  or  invested  in  its  stock,  is  in  a  condition  to  adminis- 
ter to  the  wants  of  others,  without  being  put  out  of  his  own  reach  when  oc- 
casion presents.  This  yields  an  extra  profit,  arising  from  what  is  paid  for 
the  use  of  his  money  by  others,  when  he  could  not  himself  make  use  of  it  j 
and  keeps  the  money  itself  in  a  state  of  incessant  activity.  In  the  almost 
infinite  vicissitudes  and  competitions  of  mercantile  enterprise,  there  never 
can  be  danger  of  an  intermission  of  demand,  or  that  the  money  will  remain 
for  a  moment  idle  in  the  vaults  of  the  bank.  This  additional  employment 
given  to  money,  and  the  faculty  of  a  bank  to  lend  and  circulate  a  greater 
sum  than  the  amount  of  its  stock  in  coin,  are,  to  all  the  purposes  of  trade  and 
industry,  an  absolute  increase  of  capital.  Purchases  and  undertakings,  in 
general,  can  be  carried  on  by  any  given  sum  of  bank  paper  or  credit,  as  ef- 
fectually as  by  an  equal  sum  of  gold  and  silver.  And  thus,  by  contributing 
to  enlarge  the  mass  of  industrious  and  commercial  enterprise,  banks  become 
nurseries  of  national  wealth;  a  consequence  as  satisfactorily  verified  by  ex- 
perience, as  it  is  clearly  deducible  in  theory. 

Secondly.  Greater  facility  to  the  government,  in  obtaining  pecuniary  aids, 
especially  in  sudden  emergencies.  This  is  another,  and  an  undisputed  ad- 
vantage of  public  banks:  one  which,  as  already  remarked,  has  been  realized 
in  signal  instances  among  ourselves.  The  reason  is  obvious:  the  capitals  of  a 
great  number  of  individuals  are,  by  this  operation,  collected  to  a  point,  and 
placed  under  one  direction.  The  mass  formed  by  this  union,  is,  in  a  certain 
sense,  magnified  by  the  credit  attached  to  it;  and  while  this  mass  is  always 
ready,  and  can  at  once  be  put  in  motion,  in  aid  of  the  government,  the  in- 
terest of  the  bank  to  afford  that  aid,  independent  of  regard  to  the  public 
safety  and  welfare,  is  a  sure  pledge  for  its  disposition  to  go  as  far  in  its  com- 
pliances as  can  in  prudence  be  desired.  There  is,  in  the  nature  of  things,  as 
will  be  more  particularly  noticed  in  another  place,  an  intimate  connexion 
of  interest  between  the  government  and  the  bank  of  a  nation. 

Thirdly.  The  facilitating  of  the  payment  of  taxes.  This  advantage  is 
produced  in  two  ways.     Those  who  are  in  a  situation  to  have  access  to  the 


1790.]  SECRETARY  OF  THE  TREASURY.  57 

bank,  can  have  the  assistance  of  loans,  to  answer,  with  punctuality,  the  pub- 
lic calls  upon  them.  This  accommodation  has  been  sensibly  felt  in  the  pay- 
ment of  the  duties  heretofore  laid  by  those  who  reside  where  establishments 
of  this  nature  exist.  This,  however,  though  an  extensive,  is  not  an  univer- 
sal benefit.  The  other  way  in  which  the  effect  here  contemplated  is  pro- 
duced, and  in  which  the  benefit  is  general,  is  the  increasing  of  the  quantity 
of  circulating  medium,  and  the  quickening  of  circulation.  The  manner 
in  which  the  first  happens,  has  already  been  traced .  The  last  may  require 
some  illustration.  When  payments  are  to  be  made  between  different  places, 
having  an  intercourse  of  business  with  each  other,  if  there  happen  to  be  no 
private  bills  at  market,  and  there  are  no  bank  notes  which  have  a  currency 
in  both,  the  consequence  is  that  coin  must  be  remitted.  This  is  attended 
with  trouble,  delay,  expense,  and  risk.  If,  on  the  contrary,  there  are  bank 
notes  current  in  both  places,  the  transmission  of  these  by  the  post,  or  any 
other  speedy  or  convenient  conveyance,  answers  the  purpose;  and  these 
again,  in  the  alternations  of  demand,  are  frequently  returned  very  soon  af- 
ter to  the  place  from  whence  they  were  first  sent:  whence  the  transportation 
and  re-transportation  of  the  metals  are  obviated,  and  a  more  convenient  and 
more  expeditious  medium  of  payment  is  substituted.  Nor  is  this  all— the 
metals,  instead  of  being  suspended  from  their  usual  functions  during  this 
process  of  vibration  from  place  to  place,  continue  in  activity,  and  adminis- 
ter still  to  the  ordinary  circulation,  which,  of  course,  is  prevented  from  suf- 
fering either  diminution  or  stagnation.  These  circumstances  are  additional 
causes  of  what,  in  a  practical  sense,  or  to  the  purposes  of  business,  may  be 
called  greater  plenty  of  money.  And  it  is  evident,  that  whatever  enhances 
the  quantity  of  circulating  money,  adds  to  the  ease  with  which  every  indus- 
trious member  of  the  community  may  acquire  that  portion  of  it  of  which 
he  stands  in  need,  and  enables  him  the  better  to  pay  his  taxes,  as  well  as  to 
supply  his  other  wants.  Even  where  the  circulation  of  the  bank  paper  is 
not  general,  it  must  still  have  the  same  effect,  though  in  a  less  degree.  For, 
whatever  furnishes  additional  supplies  to  the  channels  of  circulation,  in  one 
quarter,  naturally  contributes  to  keep  the  streams  fuller  elsewhere.  This 
last  view  of  the  subject,  serves  both  to  illustrate  the  position  that  banks 
tend  to  facilitate  the  payment  of  taxes,  and  to  exemplify  their  utility  to  busi- 
ness of  every  kind  in  which  money  is  an  agent. 

It  would  be  to  intrude  too  much  on  the  patience  of  the  House,  to  pro- 
long the  details  of  the  advantages  of  banks;  especially  as  all  those  which 
might  still  be  particularized,  are  readily  to  be  inferred  as  consequences  from 
those  which  have  been  enumerated.  Their  disadvantages,  real  or  supposed^ 
are  now  to  be  reviewed.  The  most  serious  of  the  charges  which  have  been, 
brought  against  them,  are, 

That  they  serve  to  increase  usury; 

That  they  tend  to  prevent  other  kinds  of  lending; 

That  they  furnish  temptations  to  overtrading;' 

That  they  afford  aid  to  ignorant  adventurers,  who  disturb  the  natural  and 
beneficial  course  of  trade; 

That  they  give  to  bankrupt  and  fraudulent  traders,  a  fictitious  credit, 
which  enables  them  to  maintain  false  appearances,  and  to  extend  their  impo- 
sitions; and  lastly, 

That  they  have  a  tendency  to  banish  gold  and  silver  from  the  country. 

There  is  great  reason  to  believe,  that  on  a  close  and  candid  survey,  it  will 
be  discovered,  that  these  charges  are  either  without  foundation,  or  that,  as 


58  REPORTS  OF  THE  [1790, 

far  as  the  evils  they  suggest  have  been  found  to  exist,  they  have  proceeded 
from  other,  or  partial,  or  temporary  causes;  are  not  inherent  in  the  nature 
and  permanent  tendency  of  such  institutions;  or  are  more  than  counterbal- 
anced by  opposite  advantages.  This  survey  shall  be  had,  in  the  order  ire" 
which  the  charges  have  been  stated.     The  first  of  them  is — 

That  banks  serve  to  increase  usury. 

It  is  a  truth,  which  ought  not  to  be  denied,  that  the  method  of  conducting 
business,  which  is  essential  to  bank  operations,  has,  among  us,  in  particular 
instances,  given  occasion  to  usurious  transactions.  The  punctuality  in  pay- 
ments, which  they  necessarily  exaet,  has  sometimes  obliged  those  who  have 
adventured  beyond  both  their  capital  and  credit,  to  procure  money  at  any 
price,  and  consequently  to  resort  to  usurers  for  aid. 

But  experience  and  practice  gradually  bring  a  cure  to  this  evil.  A  gener- 
al habit  of  punctuality  among  traders,  is  the  natural  consequence  of  the  ne- 
cessity of  observing  it  with  the  bank;  a  circumstance  which,  itself,  more  than 
compensates  for  any  occasional  ill  which  may  have  sprung  from  that  necessi- 
ty, in  the  particular  under  consideration.  As  far,  therefore,  as  traders  depend 
on  each  other  for  pecuniary  supplies,  they  can  calculate  their  expectations 
with  greater  certainty;  and  are  in  proportionably  less  danger  of  disappoint- 
ments, which  might  compel  them  to  have  recourse  to  so  pernicious  an  ex- 
pedient as  that  of  borrowing  at  usury;  the  mischiefs  of  which,  after  a  few 
examples,  naturally  inspire  great  care  in  all  but  men  of  desperate  circum- 
stances, to  avoid  the  possibility  of  being  subjected  to  them.  One,  and  not 
the  least  of  the  evils  incident  to  the  use  of  that  expedient,  if  the  fact  be 
known,  or  even  strongly  suspected,  is  loss  of  credit  with  the  bank  itself. 

The  directors  of  a  bank,  too,  though  in  order  to  extend  its  business  and  its 
popularity  in  the  infancy  of  an  institution,  they  may  be  tempted  to  go  fur- 
ther in  accommodation  than  the  strict  rules  of  prudence  will  warrant,  grow 
more  circumspect,  of  course,  as  its  affairs  become  better  established,  and  as 
the  evils  of  too  great  facility  are  experimentally  demonstrated.  They  be- 
come more  attentive  to  the  situation  and  conduct  of  those  with  whom  they 
deal;  they  observe  more  narrowly  their  operations  and  pursuits;  they  econoj 
mize  the  credit  they  give  to  those  of  suspicious  solidity ;  they  refuse  it  to  those 
whose  career  is  more  manifestly  hazardous.  In  a  word,  in  the  course  of 
practice,  from  the  very  nature  of  things,  the  interest  will  make  it  the  policy 
of  a  bank  to  succor  the  wary  and  industrious;  to  discredit  the  rash  and 
unthrifty;  to  discountenance  both  usurious  lenders  and  usurious  borrowers. 

There  is  a  leading  view  in  which  the  tendency  of  banks  will  be  seen  to  be  to 
abridge  rather  than  to  promote  usury.  This  relates  to  their  property  of  in- 
creasing the  quantity  and  quickening  the  circulation  of  money.  If  it  be 
evident,  that  usury  will  prevail  or  diminish,  according  to  the  proportion 
which  the  demand  for  borrowing  bears  to  the  quantity  of  money  at  market 
to  be  lent;  whatever  has  the  property  just  mentioned,  whether  it  be  in  the 
shape  of  paper  or  coin,  by  contributing  to  render  the  supply  more  equal  to 
the  demand,  must  tend,  to  counteract  the  progress  of  usury. 

But  bank  lending,  it  is  pretended,  is  an  impediment  to  other  kinds  of 
lending;  which,  by  confining  the  resource  of  borrowing  to  a  particular  class, 
leaves  the  rest  of  the  community  more  destitute,  and  therefore  more  exposed 
to  the  extortions  of  usurers.  As  the  profits  of  bank  stock  exceed  the  legal 
rate  of  interest,  the  possessors  of  money,  it  is  argued,  prefer  investing  it 
in  that  article  to  lending  it  at  this  rate;  to  which  there  are  the  additional  mo- 
tives of  a  more  prompt  command  of  the  capital,  and  of  more  frequent  and 


1790.] 


.SECRETARY  OF  THE  TREASURY.  &% 


exact  returns,  without  trouble  or  perplexity  in  the  collection.     This  const!* 
tutes  the  second  charge  which  has  been  enumerated. 

The  fact  on  which  this  charge  rests  is  not  to  be  admitted  without  several 
qualifications;  particularly  in  reference  to  the  state  of  things  in  this  country. 
first — The  great  bulk  of  the  stock  of  a  bank  will  consist  of  the  funds  of  men 
in  trade,  among  ourselves,  and  monied  foreigners;  the  former  of  whom  could 
not  spare  their  capitals  out  of  their  reach,  to  be  invested  in  loans  fpr  long 
periods,  on  mortgages' or  personal  security;  and  the  latter  of  whom  would 
not  be  willing  to  be  subjected  to  the  casualties,  delays,  and  embarrassments 
of  such  a  disposition  of  their  money  in  a  distant  country.  Secondly — There 
will  always  be  a  considerable  proportion  of  those  who  are  properly  the  mo- 
ney lenders  of  a  country,  who,  from-  that  spirit  of  caution  which  usually  char 
acterizes  this  description  of  men,  will  incline  rather  to  vest  their  funds  in 
mortgages  on  real  estate,  than  in  the  stock  of  a  bank,  which  they  are  apt  to 
consider  as  a  more  precarious  security. 

These  considerations  serve,  in  a  material  degree,  to  narrow  the  foundation 
of  the  objection,  as  to  the  point  of  fact.  But  there  is  a  more  satisfactory  an- 
swer to  it.  The  effect  supposed,  as  far  as  it  has  existence,  is  temporary. 
The  reverse  of  it  takes  place  in  the  general  and  permanent  operation  of  the 
thing. 

The  capital  of  every  public  bank  will,  of  course,  be  restricted  within  a  cer- 
tain defined  limit.  It  is  the  province  of  legislative  prudence  so  to  adjust  this 
limit,  that,  while  it  will  not  be  too  contracted  for  the  demand  which  the 
course  of  business  may  create,  and  for  the  security  which  the  public  ought  to 
have  for  the  solidity  of  the  paper  which  may  be  issued  by  the  bank,  it  will  still 
be  within  the  compass  of  the  pecuniary  resources  of  the  community;  so  that 
there  may  be  an  easy  practicability  of  completing  the  subscriptions  to  it. 
When  this  is  once  done,  the  supposed  effect  of  necessity  ceases.  There  is 
then  no  longer  room  for  the  investment  of  any  additional  capital.  Stock  may 
indeed  change  hands  by  one  person  seilingand  another  buying;  but  the  mo- 
ney which  the  bu37er  takes  out  of  the  common  mass  to  purchase  the  stock, 
the  seller  receives  and  restores  to  }t.  Hence  the  future  surpluses  which  may 
accumulate,  must  take  their  natural  course,  and  lending  at  interest  must  go 
on  as  if  there  were  no  such  institution. 

It  must,  indeed,  fiow  in  a  more  copious  stream.  The  bank  furnishes  an 
extraordinary  supply  for  borrowers,  within  its  immediate  sphere.  A  larger 
supply  consequently  remains  for  borrowers  elsewhere.  In  proportion  as  the. 
circulation  of  the  bank  is  extended,  there  is  an  augmentation  of  the  aggre- 
gate mass  of  money  for  answering  the  aggregate  mass  of  demand.  Hence 
greater  facility  in  obtaining  it  for  every  purpose. 

It  ought  not  to  escape  without  a  remark,  that,  as  far  as  the  citizens  of  other 
countries  become  adventurers  in  the  bank,  there  is  a  positive  increase  of  the 
gold  and  silver  of  the  country.  It  is  true,  that  from  this  a  half  yearty  rent 
is  drawn  back,  accruing  from  the  dividends  upon  the  stock.  But  as  this 
rent  arises  from  the  employment  of  the  capital  by  our  own  citizens,  it  is  pro- 
bable, that  it  is  more  than  replaced  by  the  profits  of  that  employment.  It  is 
also  likely,  that  a  part  of  it  is,  in  the  course  of  trade,  converted  into  the  pro- 
ducts of  our  country:  And  it  may  even  prove  an  incentive,  in  some  cases, 
to  emigration  to  a  country  in  which  the  character  of  citizen  is  as  easy  to  b<} 
acquired,  as  it  is  estimable  and  important.  This  view  of  the  subject  furnishe., 
an  answer  to  an  objection  which  has  been  deduced  from  the  circumstance 
here  taken  notice  of,  namely,  the  income  resulting  to  foreigners  from  the  pari 
9 


60  REPORTS  OF  THE  [1790, 

of  the  stock  owned  by  them,  which  has  been  represented  as  tending  to  drain 
the  country  of  its  specie.  In  this  objection,  the  original  investment  of  the 
capital,  and  the  constant  use  of  it  afterwards,  seem  both  to  have  been  over- 
looked. 

That  banks  furnish  temptations  to  overtrading,  is  the  third  of  the  enume- 
rated objections.  This  must  mean,  that,  by  affording  additional  aid  to  mer- 
cantile enterprise,  they  "induce  the  merchant  sometimes  to  adventure  beyond 
the  prudent  or  salutary  point.  But  the  very  statement  of  the  thing  shows 
that  the  subject  of  the  charge  is  an  occasional  ill,  incident  to  a  general  good. 
Credit  of  every  kind,  (as  a  species  of  which  only  can  bank  lending  have  the 
effect  supposed,)  must  be,  in  different  degrees,  chargeable  with  the  same  in- 
convenience. It  is  even  applicable  to  gold  and  silver,  when  they  abound  in 
circulation.  But  would  it  be  wise  on  this  account  to  decry  the  precious 
metals,  to  root-out  credit,  or  to  prescribe  the  means  of  that  enterprise  which 
is  the  main-spring  of  trade,  and  a  principal  source  of  national  wealth,  because 
it  now  and  then  runs  into  excesses,  of  which  overtrading  is  one. 

If  the  abuses  of  a  beneficial  thing  are  to  determine  its  condemnation,  there 
is  scarcely  a  source  of  public  prosperity  which  will  not  speedily  be  closed. 
In  every  case  the  evil  is  to  be  compared  with  the  good;  and  in  the  present 
case,  such  a  comparison  will  issue  in  this,  that  the  new  and  increased  ener- 
gies derived  to  commercial  enterprise,  from  the  aid  of  banks,  are  a  source 
of  general  profit  and  advantage,  which  greatly  outweigh  the  partial  ills  of 
the  overtrading  of  a  few  individuals  at  particular  times,  or  of  numbers  in 
particular  conjunctures. 

The  fourth  and  fifth  charges  may  be  considered  together.  These  relate  to 
the  aid  which  is  sometimes  afforded  by  banks  to  unskilful  adventurers  and 
fraudulent  traders.  These  charges  also  have  some  degree  of  foundation, 
though  far  less  than  has  been  pretended;  and  they  add  to  the  instances  of 
partial  ills,  connected  with  more  extensive  and  overbalancing  benefits. 

The  practice  of  giving  fictitious  credit  to  improper  persons,  is  one  of  those 
evils  which  experience  guided  by  interest  speedily  corrects.  The  bank  it- 
self is  in  so  much  jeopardy  of  being  a  sufferer  by  it,  that  it  has  the  strongest 
of  all  inducements  to  be  on  its  guard.  It  may  not  only  be  injured  immedi- 
ately by  the  delinquencies 'of  the  persons  to  whom  such  credit  is  given,  but 
eventually  by  the  incapacities  of  others,  whom  their  impositions  or  failures 
may  have  ruined. 

Nor  is  there  much  danger  of  a  bank's  being  betrayed  into  this  error  from 
want  of  information.  The  directors  themselves  being,  for  the  most  part, 
selected  from  the  class  of  traders,  are  to  be  expected  to  possess  individually 
an  accurate  knowledge  of  the  characters  and  situations 'of  those  who  come 
within  that  description.  And  they  have,  in  addition  to  this,  the  course  of 
dealing  of  the  persons  themselves  with  the  bank,  to  assist  their  judgment, 
which  is  in  most  cases  a  good  index  of  the  state  in  which  those  persons  are. 
The  artifices  and  shifts  which  those  in  desperate  or  declining  circumstances 
are  obliged  to  employ,  to  keep  up  the  countenance  which  the  rules  of-  the 
bank  require,  and  the  train  of  their  connexions,  are  so  many  prognostics, 
not  difficult  to  be  interpreted,  of  the  fate  which  awaits  them.  Hence,  it  not 
unfrequently  happens,  that  banks  are  the  first  to  discover  the  unsoundness 
of  such  characters,  and,  by  withholding  credit,  to  announce  to  the  public  that 
they  are  not  entitled  to  it. 

If  banks,  in  spite  of  every  precaution,  are  sometimes  betrayed  into  giving 
a  false  credit  to  the  persons  described,  they  more  frequently  enable  honest  and 


1790.J  SECRETARY  OF  THE  TREASURE  6i 

industrious  men,  of  small,  or  perhaps  of  no  capital,  to  undertake  and  prose- 
cute business  with  advantage  to  themselves  and  to  the  community;  and  assist 
merchants,  of  both  capital  and  credit,  who  meet  with  fortuitous  and  unfore- 
seen shocks,  which  might  without  such  helps  prove  fatal  to  them  and  to 
others,  to  make  head  against  their  misfortunes,  and  finally  to  retrieve  their 
affairs;  circumstances  -^hich  form  no  inconsiderable  encomium  on  the  utility 
of  banks. 

But  the  last  and  heaviest  charge  is  still  to  be  examined:  this  is,  that  banks 
tend  to  banish  the  gold  and  silver  out  of  the  country. 

The  force  of  this  objection  rests  upon  their  being  an  engine  of  paper 
credit,  which,  by  furnishing  a  substitute  for  the  metals,  is  supposed  to  pro- 
mote their  exportation.  It  is  an  objection,  which,  if  it  has  any  foundation, 
lies  not  against  banks  peculiarly,  but  against  every  species  of  paper  credit. 

The  most  common  answer  given  to  it  is,  that  the  thing  supposed  is  of 
little  or  no  consequence;  that  it  is  immaterial  what  serves  the  purpose  of 
money,  whether  paper  or  gold  and  silver;  that  the  effect  of  both  upon  in- 
dustry is  the  same;  and  that  the  intrinsic  wealth  of  a  nation  is  to  be  mea- 
sured, .not  by  the  abundance  of  the  precious  metals  contained  in  it,  but  by 
the  quantity  of  the  productions  of  its  labor  and  industry. 

This  answer  is  not  destitute  of  solidity,  though  not  entirely  satisfactory. 
It  is  certain,  that  the  vivification  of  industry,  by  a  full  circulation,  with  the 
aid  of  a  proper  and  well  regulated  paper  credit,  may  more  than  compensate 
for  the  loss  of  a  part  of  the  gold  and  silver  of  a  nation;  if  the  consequence  of 
avoiding  that  loss  should  be  a  scanty  or  defective  circulation. 

But  the  positive  and  permanent  increase  or  decrease  of  the  precious  me* 
tals  in  a  country,  can  hardly  ever  be  a  matter  of  indifference.  As  the  com- 
modity taken  in  lieu  of  every  other,  it  is  a  species  of  the  most  effective 
wealth;  and  as  the  money  of  the  world,  it  is  of  great  concern  to  the  State, 
that  it  possess  a  sufficiency  of  it  to  face  any  demands  which  the  protection 
of  its  external  interests  may  create. 

The  objection  seems  to  admit  of  another  and  a  more  conclusive  answer 
which  controverts  the  fact  itself.     A  nation  that  has  no  mines  of  its  own 
must  derive  the  precious  metals  from  others;  generally  speaking,  in  exchange 
for  the  products  of  its  labor  and  industry.   The  quantity  it  will  possess,  will, 
therefore,  in  the  ordinary  course  of  things,  be  regulated  by  the  favorable  or 
unfavorable  balance  of  its  trade;  that  is,  by  the  proportion  between  its  abili- 
ties to  supply  foreigners,  and  its  wants  of  them;  between  the  amount  of  its 
exportation s  and  that  of  its  importations.    Hence,  the  state  of  its  agriculture 
and  manufactures,  the  quantity  and  quality  of  its  labor  and  industry,  must 
in  the  main,  influence  and  determine  the  increase  or  decrease  of  its  o-old  and 
silver. 

If  this  be  true,  the  inference  seems  to  be,  that  well  constituted  banks  favor 
the  increase  of  the  precious  metals.  It  has  been  shown  that  they  augment, 
in  different  ways,  the  active  capital  of  a  country.  This  it  is  which  generates 
employment;  which  animates  and  expands  labor  and  industry.  Every  ad- 
dition which  is  made  to  it,  by  contributing  to  put  in  motion  a  greater  quan- 
tity of  both,  tends  to  create  a  greater  quantity  of  the  products  of  both;  and, 
by  furnishing  more  materials  for  exportation,  conduces  to  a  favorable  balance 
of  trade,  and,  consequently,  to  the  introduction  and  increase  of  gold  and  silver. 
This  conclusion  appears  to  be  drawn  from  solid  premises.  There  are, 
however,  objections  to  be  made  to  it. 


62  REPORTS  OF  THE  if  1790* 

It  may  be  said  that  as  bank  paper  affords  a  substitute  for  specie,  it  serves  to 
counteract  that  rigorous  necessity  for  the  metals  as  a  medium  of  circulation, 
which,  in  the  case  of  a  wrong  balance,  might  restrain,  in  some  degree,  their 
exportation;  and  it  may  be  added,  that,  from  the  same  cause,  in  the  same 
case,  it  would  retard  those  economical  and  parsimonious  reforms  in  the  man- 
ner of  living,  which  the  scarcity  of  money  is  calculated  to  produce,  and 
which  might  be  necessary  to  rectify  such  wrong  balance. 

There  is,  perhaps,  some  truth  in  both  these  observations;  but  they  appear 
to  be  of  a  nature  rather  to  form  exceptions  to  the  generality  of  the  conclusion,, 
than  to  overthrow  it.  The  state  of  things  in  which  the  absolute  exigencies 
of  circulation  can  be  supposed  to  resist,  with  any  effect,  the  urgent  demands 
for  specie  which  a  wrong  balance  of  trade  may  occasion,  presents  an  extreme 
case.  And  a  situation  in  which  a  too  expensive  manner  of  living  of  a  com- 
munity, compared  with  its  means,  can  stand  in  need  of  a  corrective,  from 
distress  or  necessity,  is  one  which  perhaps  rarely  results  but  from  extraor- 
dinary and  adventitious  causes:  such,  for  example^  as  a  national  revolution; 
which  unsettles  all  the  established  habits  of  the  people,  and  inflames  the 
appetite  for  extravagance,  by  the  illusions  of  an  ideal  wealth,  engendered 
by  the  continual  multiplication  of  a  depreciating  currency,  or  some  similar 
cause.  There  is  good  reason  to  believe,  that,  where  the  laws  are  wise  and 
well  executed,  and  the  inviolability  of  property  and  contracts  maintained, 
the  economy  of  a  people  will,  in  the  general  course  of  things,  correspond 
with  its  means. 

The  support  of  industry  is,  probably,  in  every  case,  of  more  consequence 
towards  correcting  a  wrong  balance  of  trade,  than  any  practicable  retrench- 
ments in  the  expenses  of  families  or  individuals;  and  the  stagnation  of  it 
would  be  likely  to  have  more  effect  in  prolonging,  than  any  such  savings  in 
shortening,  its  continuance.  That  stagnation  is  a  natural  consequence  of  an 
inadequate  medium,  which,  without  the  aid  of  bank  circulation,  would,  in 
the  cases  supposed,  be  severely  felt. 

It  also  deserves  notice,  that,  as  the  circulation  of  a  bank  is  always  in  a 
compound  ratio  to  the  fund  upon  which  it  depends,  and  to  the  demand  for 
it,  and  as  that  fund  is  itself  affected  by  the  exportation  of  the  metals,  there 
is  no  danger  of  its  being  overstocked,  as  in  the  case  of  paper  issued  at  the 
pleasure  of  the  government,  or  of  its  preventing  the  consequences  of  any 
unfavorable  balance  from  being  sufficiently  felt  to  produce  the  reforms 
alluded  to,  as  far  as  circumstances  may  require  and  admit. 

Nothing  can  be  more  fallible  than  the  comparisons  which  have  been  made 
between  different  countries,  to  illustrate  the  truth  of  the  position  under  con- 
sideration. The  comparative  quantity  of  gold  and  silver  in  different  coun- 
tries, depends  upon  an  infinite  variety  of  facts  and  combinations,  all  of 
vdiich  ought  to  be  known  in  order  to  judge  whether  the  existence  or  non- 
existence of  paper  currencies  has  ai^r  share  in  the  relative  proportions  they 
contain.  The  mass  and  value  of  the  productions  of  the  labor  and  industry 
of  each,  compared  with  its  wants;  the  nature  of  its  establishments  abroad; 
the  kind  of  wars  in  which  it  is  usually  engaged;  the  relations  it  bears  to  the 
countries  which  are  the  original  possessors  of  those  metals;  the  privileges 
it  enjoys  in  their  trade;  these,  and  a  number  of  other  circumstances,  are 
all  to  be  taken  into  the  account,  and  render  the  investigation  too  complex  to 
justify  any  reliance  on  the  vague  and  general  surmises  which  have  been 
hitherto  hazarded  on  the  point. 


1790.]  secretary  of  the  Treasury.  us 

In  the  foregoing  discussion,  the  objection  has  been  considered  as  applying 
to  the  permanent  expulsion  and  diminution  of  the  metals.  Their  temporary 
exportation,  for  particular  purposes,  has  not  been  contemplated.  This,  it 
must  be  confessed,  is  facilitated  by  banks,  from  the  faculty  banks  possess  of 
supplj'ing  their  place.  But  their  utility  is  in  nothing  more  conspicuous, 
than  in.  these  very  cases.  They  enable  the  government  to  pay  its  foreign 
debts,  and  to  answer  any  exigencies  which  the  external  concerns  of  the 
community  may  have  produced.  They  enable  the  merchant  to  support  his 
credit,  (on  which  the  prosperity  of  trade  depends,)  when  special  circum- 
stances prevent  remittances  in  other  modes.  They  enable  him  also  to  pro- 
secute enterprises  which  ultimately  tend  to  an  augmentation  of  the  species 
of  wealth  in  question.  It  is  evident  that  gold  and  silver  may  often  be  em- 
ployed in  procuring  commodities  abroad,  which,  in  a  circuitous  commerce, 
replace  the  original  fund,  with  considerable  addition.  But  it'  is  not  to  be 
inferred  from  this  facility  given  to  temporary  exportation,  that  banks,  which 
are  so  friendly  to  trade  and  industry,  are,  in  their  general  tendency,  inimical 
to  the  increase  of  the  precious  metals. 

These  several  views  of  the  subject  appear  sufficient  to  impress  a  full  con- 
viction of  the  utility  of  banks,  and  to  demonstrate  that  they  are  of  great 
importance,  not  only  in  relation  to  the  administration  of  the  finances,  but  in 
the  general  system  of  the  political  economy. 

The  judgment  of  many  concerning  them,  has,  no  doubt,  been  perplexed,  by 
the  misinterpretation  of  appearances  which  were  to  be  ascribed  to  other 
causes.  The  general  devastation  of  personal  property,  occasioned  by  the 
late  war,  naturally  produced,  on  the  one  hand,  a  great  demand  for  money, 
and,  on  the  other,  a  great  deficiency  of  it  to  answer  the  demand.  Some  in- 
judicious laws,  which  grew  out  of  the  public  distresses,  by  impairing  confi- 
dence, and  causing  a  part  of  the  inadequate  sum  in  the  country  to  be  locked 
up,  aggravated  the  evil.  The  dissipated  habits  contracted  by  many  individu- 
als during  the  war,  which,  after  the  peace,  plunged  them  info  expenses  be- 
yond their  incomes;  the  number  of  adventurers  without  capital,  and,  in  many 
instances,  with/out  information,  who  at  that  epoch  rushed  into  trade,  and 
were  obliged  to  make  any  sacrifices  to  support  a  transient  credit;  the  employ- 
ment of  considerable  sums  in  speculations  upon  the  public  debt,  which,  from 
its  unsettled  state,  was  incapable  of  becoming  itself  a  substitute:  all  these 
circumstances  concurring,  necessarily  led  to  usurious  borrowing,  produced 
most  of  the  inconveniences,  and  were  the  true  cause  of  most  of  the  appear- 
ances, which,  where  banks  were  established,  have  been  by  some  erroneously 
placed  to  their  account:  a  mistake  which  they  might  easily  have  avoided  by 
turning  their  eyes  towards  places  where  there  were  none,  and  where,  never- 
theless, the  same  evils  would  have  been  perceived  to  exist,  even  in  a  greater 
degree  than  where  those  institutions  had  obtained. 

These  evils  have  either  ceased  or  been  greatly  mitigated.  Their  more 
complete  extinction  may  be  looked  for  from  that  additional  security  to  pro- 
perty which  the  Constitution  of  the  United  States  happily  gives;  (a  circum- 
stance of  prodigious  moment  in  the  scale,  both  of  public  and  private  prosperi- 
ty;) from  the  attraction  of  foreign  capital,  under  the  auspices  of  that  security, 
to  be  employed  upon  objects,  and  in  enterprises,  for  which  the  state  of  this 
country  opens  a  wide  and  inviting  field;  from  the  consistency  and  stability 
which  the  public  debt  is  fast  acquiring,  as  well  in  the  public  opinion  at  home 
and  abroad,  as,  in  fact,  from  the  augmentation  of  capital  which  that  circum- 
stance and  the  quarter-vearly  payment  of  interest  will  afford;  and  from  the 


£4  REPORTS  OF  THE  [1790, 

more  copious  circulation  which  will  be  likely  to  be  created  by  a  well  consti- 
tuted national  bank. 

The  establishment  of  banks  in  this  countxy  seems  to  be  recommended  by 
reasons  of  a  peculiar  nature.  Previously  to  the  revolution,  circulation  was 
in  a  great  measure  carried  on  by  paper  emitted  by  the  several  local  govern- 
ments. In  Pennsylvania  alone,  the  quantity  of  it  was  near  a  million  and  a 
half  of  dollars.  This  auxiliary  may  be  said  to  be  now  at  an  end.  And  it 
is  generally  supposed  that  there  has  been,  for  some  time  past,  a  deficiency 
of  circulating  medium.  How  far  that  deficiency  is  to  be  considered  as  real 
or  imaginary,  is  not  susceptible  of  demonstration;  but  there  are  circumstances 
and  appearances,  which,  in  relation  to  the  country  at  large,  countenance  the 
supposition  of  its  reality. 

The  circumstances  are,,  besides  the  fact  just  mentioned  respecting  paper 
emissions,  the  vast  tracts  of  waste  land,  and  the  little  advanced  state  of  manu- 
factures. The~progressive  settlement  of  the  former,  while  it  promises  ample 
retribution,  in  the  generation  of  future  resources,  diminishes  or  obstructs, 
in  the  mean  time,  the  active  wealth  of  the  country.  It  not  only  draws  off 
a  part  of  the  circulating  money,  and  places  it  in  a  more  passive  state,  but  it 
diverts,  into  its  own  channels,  a  portion  of  that  species  of  labor  and  industry 
which  would  otherwise  be  employed  in  furnishing  materials  for  foreign  trade, 
and  which,  by  contributing  to  a  favorable  balance,  would  assist  the  intro- 
duction of  specie.  In  the  early  periods  of  new  settlements,  the  settlers  not 
only  furnish  no  surplus  for  exportation,  but  they  consume  a  part  of  that  which 
is  produced  by  the  labor  of  others.  The  same  thing  is  a  cause  that  manu- 
factures do  not  advance,  or  advance  slowly.  And  notwithstanding  some 
hypotheses  to  the  contrary,  there  are  many  things  to  induce  a  suspicion, 
that  the  precious  metals  will  not  abound  in  any  country  which  has  not 
mines,  or  variety  of  manufactures.  They  have  been  sometimes  acquired 
by  the  sword;  but  the  modern  system  of  war  has  expelled  this  resource, 
and  it  is  one  upon  which  it  is  to  be  hoped  the  United  States  will  never  be 
inclined  to  rely. 

The  appearances  alluded  to,  are,  greater  prevalency  of  direct  barter,  in 
the  more  interior  districts  of  the  country — which,  however,  has  been  for 
some  time  past  gradually  lessening;  and  greater  difficulty,  generally,  in  the 
advantageous  alienation  of  improved  real  estate;  which,  also,  has  of  late 
diminished,  but  is  still  seriously  felt  in  different  parts  of  the  Union.  The 
difficulty  of  getting  money,  which  has  been  a  general  complaint,  is  not 
added  to  the  number;  because  it  is  the  complaint  of  all  times,  and  one  in 
which  imagination  must  ever  have  too  great  scope  to  permit  an  appeal  to  it. 
If  the  supposition  of  such  a  deficiency  be  in  any  degree  founded,  and 
some  aid  to  circulation  be  desirable,  it  remains  to  inquire  what  ought  to  be 
the  nature  of  that  aid. 

The  emitting  of  paper  money  by  the  authority  of  government  is  wisely 
prohibited  to  the  individual  States,  by  the  national  Constitution;  and  the 
spirit  of  that  prohibition  ought  not  to  be  disregarded  by  the  government  of 
the  United  States.  Though  paper  emissions,  under  a  general  authority,  might 
have  some  advantages  not  applicable,  and  be  free  from  some  disadvantages 
which  are  applicable  to  the  like  emissions  by  the  States,  separately,  yet 
they  are  of  a  nature  so  liable  to  abuse — and,  it  may  even  be  affirmed,  so  cer- 
tain of  being  abused— that  the  wisdom  of  the  government  will  be  shown  in 
never  trusting  itself  with  the  use  of  so  seducing  and  dangerous  an  expedient. 
In  times  of  tranquillity,  it  might  have  no  ill  consequence;  it  might  even 


1790.]  SECRETARY  OF  THE  TREASURY.  &5 

perhaps  be  managed  in  a  way  to  be  productive  of  good:  but  in  great  and 
trying  emergencies,  there  is  almost  a  moral  certainty  of  its  becoming  mis- 
chievous. The  stamping  of  paper  is  an  operation  so  much  easier  than  the 
laying  of  taxes,  that  a  government,  in  the  practice  of  paper  emissions,  would 
rarely  fail,  in  any  such  emergency,  to  indulge  itself  too  far  in  the  employ- 
ment of  that  resource,  to  avoid  as  much  as  possible  one  less  auspicious  to 
present  popularity.  If  it  should  not  even  be  carried  so  far  as  to  be  rendered 
an  absolute  bubble,  it  would  at  least  be  likely  to  be  extended  to  a  degree 
which  would  occasion  an  inflated  and  artificial  state  of  things,  incompatible 
with  the  regular  and  prosperous  course  of  the  political  economy. 

Among  other  material  differences  between  a  paper  currency,  issued  by  the 
mere  authority  of  government,  and  one  issued  by  a  bank,  payable  in  coin* 
is  this:  That,  in  the  first  case,  there  is  no  standard  to  which  an  appeal  can  be 
made,  as  to  the  quantity  which  will  only  satisfy,  or  which  will  surcharge  the 
circulation:  in  the  last,  that  standard  results  from  the  demand.  If  more 
should  be  issued  than  is  necessary,  it  will  return  upon  the  bank.  Its  emis- 
sions, as  elsewhere  intimated,  must  always  be  in  a  compound  ratio  to  the 
fund  and  the  demand: — whence  it  is  evident,  .that  there  is  a  limitation  in 
the  nature  of  the  thing;  while  the  discretion  of  the  government  is  the  only 
measure  of  the  extent  of  the  emissions,  by  its  own  authority. 

This  consideration  further  illustrates  the  danger  of  emissions  of  that  sort, 
and  the  preference,  which  is  due  to  bank  paper. 

The  payment  of  the  interest  of  the  public  debt,  at  thirteen  different  places, 
is  a  weighty  reason,  peculiar  to  our  immediate  situation,  for  desiring  a  bank 
circulation.  Without  a  paper,  in  general  currency,  equivalent  to  gold  and 
silver,  a  considerable  proportion  of  the  specie  of  the  country  must  always 
be  suspended  from  circulation,  and  left  to  accumulate,  preparatorily  to  each 
day  of  payment;  and  as  often  as  one  approaches,  there  must  in  several  cases 
be  an  actual  transportation  of  the  metals,  at  both  expense  and  risk,  from  their 
natural  and  proper  reservoirs,  to  distant  places.  This  necessity  will  be  fell: 
very  injuriously  to  the  trade  of  some  of  the  States;  and  will  embarrass,  not 
a  little,  the  operations  of  the  treasury  in  those  States.  It  will  also  obstruct 
those  negotiations,  between  different  parts  of  the  Union,  by  the  instrumen- 
tality of  treasury  bills,  which  have  already  afforded  valuable  accommodations- 
to  trade  in  general. 

Assuming  it,then,as  a  consequence,  from  what  has  been  said, that  a  national 
bank  is  a  desirable  institution,  two  inquiries  emerge:  Is  there  no  such  insti- 
tution, already  in  being,  which  has  a  claim  to  that  character,  and  which 
supersedes  the  propriety  or  necessity  of  another?  If  there  be  none,  what 
are  the  principles  upon  which  one  ought  to  be  established? 

There  are  at  present  three  banks  in  the  United  States:  that  of  North 
America,  established  in  the  city  of  Philadelphia;  that  of  New-York,  esta- 
blished in  the  city  of  New- York;  that  of  Massachusetts,  established  in  the 
town  of  Boston.  Of  these  three,  the  first  is  the  only  one  which  has  at  any 
time  had  a  direct  relation  to  the  government  of  the  United  States. 

The  Bank  of  North  America  originated  in  a  resolution  of  Congress  of  the 
26th  of  May,  1781,  founded  upon  a  proposition  of  the  Superintendent  of 
Finance,  which  was  afterwards  carried  into  execution  by  an  ordinance  of 
the  31st  of  December  following,  entitled,  "  An  ordinance  to  incorporate  the 
subscribers  to  the  Bank  of  North  America." 

The  aid  afforded  to  the  United  States  by  this  institution,  during  the  re- 
maining period  of  the  war,  was  of  essential  consequence;  and  its  conduct 


§0  REPORTS  OF  THE  [1790. 

towards  them  since  the  peace,  has  not  weakened  its  title  to  their  patronage 
and  favor.  So  far,  its  pretensions  to  the  character  in  question  are  respecta- 
ble; but  there  are  circumstances  which  militate  against  them;  and  conside- 
rations which  indicate  the  propriety  of  an  establishment  on  different  prin- 
ciples. 

The  directors  of  this  bank,  on  behalf  of  their  constituents,  have  since 
accepted  and  acted  under  a  new  charter  from  the  State  of  Pennsylvania, 
materially  variant  from  their  original  one,  and  which  so  narrows  the  founda- 
tion of  the  institution,  as  to  render  it  an  incompetent  basis  for  the  extensive 
purposes  of  a  national  bank. 

The  limit  assigned  by  the  ordinance  of  Congress  to  the  stock  of  the  bank, 
is  ten  millions  of  dollars.  The  last  charter  of  Pennsylvania  confines  it  to 
two  millions.  Questions  naturally  arise,  whether  there  be  not  a  direct  re- 
pugnancy between  two  charters  so  differently  circumstanced?  and  whether 
the  acceptance  of  the  one,  is  not  to  be  deemed  a  virtual  surrender  of  the 
other?  But,  perhaps  it  is  neither  adviseable  nor  necessary  to  attempt  a  solu- 
tion of  them. 

There  is  nothing  in  the  acts  of  Congress,,  which  imply  an  exclusive  right 
in  the  institution  to  which  they  relate,  except  during  the  term  of  the  war. 
There  is,  therefore,  nothing,  if  the  public  good  require  it,  which  prevents 
the  establishment  of  another.  It  may,  however,  be  incidentally  remarked, 
that  in  the  general  opinion  of  the  citizens  of  the  United 'States,  the  Bank  of 
North  America  has  taken  the  station  of  a  bank  of  Pennsylvania  only.  This 
is  a  strong  argument  for  a  new  institution,  or  for  a  renovation  of  the  old,  to 
restore  it  to  the  situation  in  which  it  originally  stood  in  the  view  of  the 
United  States. 

But,  though  the  ordinance  of  Congress  contains  no  grant  of  exclusive  pri- 
vileges, there  may  be  room  to  allege,  that  the  government  of  the  United 
States  ought  not,  in  point  of  candor  and  equity,  to  establish  any  rival  or  in- 
terfering institution,  in  prejudice  of  the  one  already  established;  especially 
as  this  has,  from  services  rendered,  well  founded  claims  to  protection  and 
regard. 

The  justice  of  such  an  observation,  ought,  within  proper  bounds,  to  be  ad- 
mitted. A  new  establishment  of  the  sort,  ought  not  to  be  made  without  co- 
gent and  sincere  reasons  of  public  good.  And,  in  the  manner  of  doing  it, 
every  facility  should  be  given  to  a  consolidation  of  the  old  with  the  new, 
upon  terms  not  injurious  to  the  parties  concerned.  But  there  is  no  ground 
to  maintain,  that,  in  a  case  in  which  the  government  has  made  no  condition 
restricting  its  authority,  it  ought  voluntarily  to  restrict  it,  through  regard  to 
the  interests  of  a  particular  institution,  when  those  of  the  State  dictate  a 
different  course;,  especially,  too,  after  such  circumstances  have  intervened, 
as  characterize  the  actual  situation  of  the  bank  of  North  America. 

The  inducements  to  a  new  disposition  of  the  thing  are  now  to  be  consider- 
ed. The  first  of  them  which  occurs,  is,  the  at  least  ambiguous  situation  in 
which  the  Bank  of  North  America  has  placed  itself,  by  the  acceptance  of 
its  last  charter.  If  this  has  rendered  it  the  mere  bank  of  a  particular  State, 
liable  to  dissolution  at  the  expiration  of  fourteen  years,  to  which  term  the 
act  of  that  State  has  restricted  its  duration,  it  would  be  neither  fit  nor  expe- 
dient to  accept  it  as  an  equivalent  for  a  bank  of  the  United  States. 

The  restriction  of  its  capital  also,  which,  according  to  the  same  supposi- 
tion, cannot  be  extended  beyond  two  millions  of  dollars,  is  a  conclusive  rea- 
son for  a  different  establishment.     So  small  a  capital  promises  neither  the  re- 


1790.]  SECRETARY  OP  THE  TREASURY:  67 

quisiteaid  to  government,  nor  the  requisite  security  to  the  community.  It 
may  answer  very  well  the  purposes  of  local  accommodation,  but  is  an  in- 
adequate foundation  for  a  circulation  co-extensive  with  the  United  States, 
embracing  the  whole  of  their  revenues,  and  affecting  every  individual  into 
whose  hands  the  paper  may  come. 

And,  inadequate  as  such  a  capital  would  be  to  the  essential  ends  of  a  na- 
tional bank,  it  is  liable  to  be  rendered  still  more  so,  by  that  principle  of  the 
constitution  of  the  Bank  of  North  America,  contained  equally  in  its  old  and  in 
its  new  charter;  which  leaves  the  increase  of  the  actual  capital  at  anytime 
(now  far  short  of  the  allowed  extent)  to  the  discretion  of  the  directors  or 
stockholders.  It  is  naturally  to  be  expected,  that  the  allurements  of  an  ad- 
vanced price  of  stock,  and  of  large  dividends,  may  disincline  those  who  are 
interested  to  an  extension  of  capital,  from  which  they  will  be  apt  to  fear  a 
diminution  of  profits.  And  from  this  circumstance,  the  interest  and  ac- 
commodation of  the  public,  (as  well  individually  as  collectively,)  are  made 
more  subordinate  to  the  interest,  real  or  imagined,  of  the  stockholders,  than 
they  ought  to  be.  It  is  true,  that  unless  the  latter  be  consulted,  there  can 
be  no  bank,  (in  the  sense  at  least  in  which  institutions  of  this  kind,  worthy 
of  confidence,  can  be  established  in  this  country).  But,  it  does  not  follow 
that  this  is  alone  to  be  consulted,  or  that  it  even  ought  to  be  paramount 
Public  utility  is  more  truly  the  object  of  public  banks,  than  private  profit. 
And  it  is  the  business  of  government  to  constitute  them  on  such  principles., 
that  while  the  latter  will  result  in  a  sufficient  degree  to  afford  competent  mo- 
tives to  engage  in  them,  the  former  be  not  made  subservient  to  it.  To  effect 
this,  a  principal  object  of  attention  ought  to  be  to  give  free  scope  to  the 
creation  of  an  ample  capital;  and  with  this  view,  fixing  the  bounds  which 
are  deemed  safe  and  convenient,  to  leave  no  discretion  either  to  stop  short 
of  them,  or  to  overpass  them.  The  want  of  this  precaution  in  the  establish- 
ment of  the  Bank  of  North  America,  is  a  further  and  an  important  reason 
for  desiring  one  differently  constituted. 

There  may  be  room  at  first  sight  for  a  supposition,  that  as  the  profits  of  a 
bank  will  bear  a  proportion  to  the  extent  of  its  operations,  and  as  for  this 
reason  the  interest  of  the  stockholders  will  not  be  disadvantageously  affected 
by  any  necessary  augmentations  of  capital,  there  is  no  cause  to  apprehend 
that  they  will  be  indisposed  to  such  augmentations.  But  most  men,  in 
matters  of  this  nature,  prefer  the  certainties  they  enjoy  to  probabilities  de- 
pending on  untried  experiments;  especially  when  these  promise  rather  that 
they  will  not  be  injured,  than  that  they  will  be  benefited. 

From  the  influence  of  this  principle,  and  a  desire  of  enhancing  its  profits, 
the  directors  of  a  bank  will  be  more  apt  to  overstrain  its  faculties,  in  an  at- 
tempt to  face  the  additional  demands  which  the  course  of  business  may 
create,  than  to  set  on  foot  new  subscriptions,  which  may  hazard  a  diminu- 
tion of  the  profits,  and  even  a  temporary  reduction  of  the  price  of  stock. 

Banks  are  among  the  best  expedients  for  lowering  the  rate  of  interest  in 
a  country;  but,  to  have  this  effect,  their  capitals  must  be  completely  equal  to 
all  the  demands  of  business,  and  such  as  will  tend  to  remove  the  idea,  that 
the  accommodations  they  afford  are  in  any  degree  favors;  an  idea  very  apt  to 
accompany  the  parsimonious  dispensation  of  contracted  funds.  In  this,  as 
in  every  other  case,  the  plenty  of  the  commodity  ought  to  beget  a  modera- 
tion of  the  price. 

The  want  of  a  principle  of  rotation  in  the  constitution  of  the  Bank  of 
North  America,  is  another  argument  for  a  variation  of  the  establishment 
10 


m 


REPORTS  OF  THfe  ("1790. 


Scarcely  one  of  the  reasons  which  militate  against  this  principle  in  the  con- 
stitution of  a  country,  is  applicable  to  that  of  a  bank;  while  there  are  strong 
reasons  in  favor  of  it  in  relation  to  the  one,  which  do  not  apply  to  the  other. 
The  knowledge  to.  be  derived  from  experience  is  the>  only  circumstance 
common  to  both,  which  pleads  against  rotation  in  the  directing  officers  of  a 
bank. 

But  the  objects  of  the  government  of  a  nation,  and  those  of  the  government 
of  a  bank,  are  so  widely  different,  as  greatly  to  weaken  the  force  of  that  con- 
sideration in  reference  to  the  latter.  Almost  every  important  case  of  legis- 
lation requires,  towards  a  right  decision,  a  general  and  accurate  acquaintance 
with  the  affairs  of  the  State,  and  habits  of  thinking  seldom  acquired  but 
from  a  familiarity  with  public  concerns.  The  administration  of  a  bank,  on 
the  contrary,  is  regulated  \by  a  few  simple  fixed  maxims,  the  application  of 
which  is  not  difficult  to  any  man  of  judgment,  especially  if  instructed  in  the 
principles  of  trade.  It  is,  in  general,  a  constant  succession  of  the  same  de- 
tails. 

But,  though  this  be  the  case,  the  idea  of  the  advantages  of  experience  is 
not  to  be  slighted.  Room  ought  to  be  left  for  the  regular  transmission  of 
official  information ;  and,  for  this  purpose,  the  head  of  the  direction  ought  to 
be  excepted  from  the  principle  of  rotation.  With  this  exception,  and  with 
the  a;d  of  the  information  of  the  subordinate  officers,  there  can  be  no  danger 
of  any  ill  effects  from  want  of  experience  or  knowledge;  especially  as  the  pe- 
riodical exclusion  ought  not  to  reach  the  whole  of  the  directors  at  one  time. 
The  argument  in  favor  of  the  principle  of  rotation  is  this;  that,  by  lessen- 
ing the  danger  of  combinations  among  the  directors,  to  make  the  institution 
subservient  to  party  views,  or  to  the  accommodation,  preferably,  of  any  par- 
ticular set  of  men,  it  will  render  the  public  confidence  more  firm,  stable, 
and  unqualified. 

When  it  is  considered  that  the  directors  of  a  bank  are  not  elected  by  the 
great  body  of  the  community,  in  which  a  diversity  of  views  will  naturally 
prevail  at  different  conjunctures,  but  by  a  small  and  select  class  of  men, 
among  whom  it  is  far  more  easy  to  cultivate  a  steady  adherence  to  the  same 
persons  and  objects,  and  that  those  directors  have  it  in  their  power  so  im- 
mediately to  conciliate,  by  obliging  the  most  influential  of  this  class,  it  is 
easy  to  perceive  that,  without  the  principle  of  rotation,  changes  in  that  body 
can  rarely  happen,  but  as  a  concession  which  they  may  themselves  think  it. 
expedient  to  make  to  public  opinion. 

The  continual  administration  of  an  institution  of  this  kind,  by  the  same 
persons,  will  never  fail,  with  or  without  cause,  from  their  conduct,  to  excite 
distrust  and  discontent.  The  necessary  secrecy  of  their  transactions  gives 
unlimited  scope  to  imagination  to  infer  that  something  is  or  may  be  wrong. 
And  this  inevitable  mystery  is  a  solid  reason  for  inserting  in  the  constitution 
of  a  bank  the  necessity  of  a  change  of  men.  As  neither  the  mass  of  the  par- 
ties interested,  nor  the  public  in  general,  can  be  permitted  to  be  witnesses  of 
the  interior  management  of  the  directors,  it  is  reasonable  that  both  should  have 
that  check  upon  their  conduct,  and  that  security  against  the  prevalency  of  a 
partial  or  pernicious  system,  which  will  be  produced  by  the  certainty  of  pe- 
riodical changes.  Such,  too,  is  the  delicacy  of  the  credit  of  a  bank,  that 
every  thing  which  can  fortify  confidence  and  repel  suspicion,  without  in- 
juring its  operations,  ought  carefully  to  be  sought  after  in  its  formation. 

A  further  consideration  in  favor  of  a  change,  is  the  improper  rule  by 
which  the  right  of  voting  for  directors  is  regulated  in  the  plan  upon  which 


1700.]  SECRETARY  OF  THE  TREASURY.  gj 

the  bank  of  North  America  was  originally  constituted,  namely,  a  vote  for 
each  share,  and  the  want  of  a  rule  in  the  last  charter;  unless  the  silence  of  it, 
on  that  point,  may  signify  that  every  stockholder  is  to  have  an  equal  and  a 
single  vote,  which  would  be  a  rule  in  a  different  extreme  not  less  erroneous. 
It  is  of  importance  that  a  rule  should  be  established  on  this  head,  as  it  is  one 
of  those  things  which  ought  not  to  be  left  to  discretion;  and  it  is,  conse- 
quently, of  equal  importance  that  the  rule  should  be  a  proper  one. 

A  vote  for  each  share  renders  a  combination  between  a  few  principal 
stockholders,  to  monopolize  the  power  and  benefits  of  the  bank,  too  easy. 
An  equal  vote  to  each  stockholder,  however  great  or  small  his  interest  in 
the  institution,  allows  not  that  degree  of  weigbt  to  large  stockholders  which 
it  is  reasonable  they  should  have,  and  which,  perhaps,  their  security  and 
that  of  the  bank  require.  A  prudent  mean  is  to  be  preferred.  A  convic- 
tion of  this  has  produced  a  by-law  of  the  corporation  of  the  bank  of  North 
America,  which  evidently  aims  at  such  a  mean.  But  a  reflection  arises  here, 
that  a  like  majority  with  that  which  enacted  this  law,  may,  at  any  moment 
repeal  it.  , 

The  last  inducement  which  shall  be  mentioned,  is  the  want  of  precautions 
to  guard  against  a  foreign  influence  insinuating  itself  into  the  direction  of 
the  bank.  It  seems  scarcely  reconcilable  with  a  due  caution,  to  permit  that 
any  but  citizens  should  be  eligible,  as  directors  of  a  national  bank,  or  that 
non-resident  foreigners  should  be  able  to  influence  the  appointment  of  di- 
rectors by  the  votes  of  their  proxies.  In  the  event,  however,  of  an  incor- 
poration of  the  bank  of  North  America,  in  the  plan  it  may  be  necessary  to 
qualify  this  principle,  so  as  to  leave  the  right  of  foreigners,  who  now  hold 
shares  of  its  stock,  unimpaired;  but  without  the  power  of  transmitting  the 
privilege  in  question  to  foreign  alienees. 

It  is  to  be  considered  that  such  a  bank  is  not  a  mere  matter  of  private  pro* 
perty,  but  a  political  machine  of  the  greatest  importance  to  the  State. 

There  are  other  variations  from  the  constitution  of  the  bank  of  North 
America,  not  of  inconsiderable  moment,  which  appear  desirable,  but  which 
are  not  of  magnitude  enough  to  claim  a  preliminary  discussion.  These  will 
be  seen  in  the  plan  which  will  be  submitted  in  the  sequel. 

If  the  objections  which  have  been  stated,  to  the  constitution  of  the  bank 
of  North  America,  are  admitted  to  be  well  founded,  they  will,  nevertheless, 
not  derogate  from  the  merit  of  the  main  design,  or  of  the  services  which 
that  bank  has  rendered,  or  of  the  benefits  which  it  has  produced.  The  cre- 
ation of  such  an  institution,  at  the  time  it  took  place,  was  a  measure  dictated 
by  wisdom.  Its  utility  has  been  amply  evinced  by  its  fruits — American  in- 
dependence owes  much  to  it.  And  it  is  very  conceivable,  that  reasons  of  the 
moment  may  have  rendered  those  features  in  it  inexpedient,  which  a  revi- 
sion, with  a  permanent  view,  suggests  as  desirable. 

The  order  of  the  subject  leads  next  to  an  inquiry  into  the  principles  upon 
which  a  national  bank  ought  to  be  organized. 

The  situation  of  the  United  States  naturally  inspires  a  wish  that  the  form 
of  the  institution  could  admit  of  a  plurality  of  branches.  But  various  con- 
siderations discourage  from  pursuing  this  idea.  The  complexity  of  such  a 
plan  would  be  apt  to  inspire  doubts,  which  might  deter  from  adventuring  in 
it.  And  the  practicability  of  a  safe  and  orderly  administration,  though  not 
to  be  abandoned  as  desperate,  cannot  be  made  so  manifest  in  perspective,  as 
to  promise  the  removal  of  those  doubts,  or  to  justify  the  government  in 
adopting  the  idea  as  an  original  experiment.      The  most  that  would  seem 


70  REPORTS  OF  THE  [1790, 

adviseable,  on  this  point,  is  to  insert  a  provision  which  may  lead  to  it  here- 
after, if  experience  shall  more  clearly  demonstrate  its  utility,  and  satisfy 
those  who  may  have  the  direction,  that  it  may  be  adopted  with  safety.  It 
is  certain  that  it  would  have  some  advantages,  both  peculiar  and  important. 
Besides  more  general  accommodation,  it  would  lessen  the  danger  of  a  run 
upon  the  bank. 

The  argument,  against  it  is,  that  each  branch  must  be  under  a  distinct, 
though  subordinate  direction,  to  which  a  considerable  latitude  of  discre- 
tion must  of  necessity  be  intrusted.  And  as  the  property  of  the  whole 
institution  would  be  liable  for  the  engagements  of  each  part,  that  and  its 
credit  would  be  at  stake,  upon  the  prudence  of  the  directors  of  every  part. 
The  mismanagement  of  either  branch  might  hazard  serious  disorder  in  the 
whole. 

Another  wish7  dictated  by  the  particular  situation  of  the  country,  is,  that 
the  bank  could  be  so  constituted  as  to  be  made  an  immediate  instrument  of 
loans  to  the  proprietors  of  land;  but  this  wish  also  yields  to  the  difficulty  of 
accomplishing  it.  Land  is  alone  an  unfit  fund  for  a  bank  circulation.  If 
the  notes  issued  upon  it  were  not  to  be  payable  in  coin,  on  demand,  or  at  a 
short  date;  this  would  amount  to  nothing  more  than  a  repetition  of  the 
paper  emissions,  which  are  now  exploded  by  the  general  voice.  If  the 
notes  are  to  be  payable  in  coin,  the  land  must  first  be  converted  into  it  by 
sale,  or  mortgage.  The  difficulty  of  effecting  the  latter,  is  the  very  thing 
which  begets  the  desire  of  finding  another  resource,  and  the  former  would 
not  be  practicable  on  a  sudden  emergency,  but  with  sacrifices  which  would 
make  the  cure  worse  than  the  disease.  Neither  is  the  idea  of  constituting 
the  fund  partly  of  coin  and  partly  of  land,  free  from  impediments.  These 
two  species  of  property  do  not,  for  the  most  part,  unite  in  the  same  hands. 
Will  the  monied  man  consent  to  enter  into  a  partnership  with  the  landholder, 
by  which  the  latter  will  share  in  the  profits  which  will  he  made  by  the  money 
of  the  former?  The  money,  it  is  evident,  will  be  the  agent  or  efficient  cause 
of  the  profits — the  land  can  only  be  regarded  as  an  additional  security.  It  is 
not  difficult  to  foresee,  that  an  union,  on  such  terms,  will  not  readily  be  formed. 
If  the  landholders  are  to  procure  the  money  by  sale  or  mortgage  of  a  part 
of  their  lands,  this  they  can  as  well  do  when  the  stock  consists  wholly  of 
money,  as  if  it  were  to  be  compounded  of  money  and  land. 

To  procure  for  the  landholders  the  assistance  of  loans,  is  the  great  desi- 
deratum. Supposing  other  difficulties  surmounted,  and  a  fund  created,  com- 
posed partly  of  coin  and  partly  of  land,  yet  the  benefit  contemplated  could 
only  then  be  obtained,  by  the  bank's  advancing  them  its  notes  for  the  whole, 
or  part,  of  the  value  of  the  lands  they  had  subscribed  to  the  stock.  If  this 
advance  was  small,  the  relief  aimed  at  would  not  be  given;  if  it  was  large, 
the  quantity  of  notes  issued  would  be  a  cause  of  distrust,  and,  if  received 
at  all,  they  would  be  likely  to  return  speedily  upon  the  bank  for  payment; 
which,  after  exhausting  its  coin,  might  be  under  the  necessity  of  turning  its 
lands  into  money,  at  any  price  that  could  be  obtained  for  them,  to  the  irre- 
parable prejudice  of  the  proprietors. 

Considerations  of  public  advantage  suggest  a  further  wish,  which  is, 
that  the  bank  could  be  established  upon  principles  that  would  cause  the  pro- 
fits of  it  to  redound  to  the  immediate  benefit  of  the  State.  This  is  contem- 
plated by  many  who  speak  of  a  national  bank,  but  the  idea  seems  liable  to 
insuperable  objections.  To  attach  full  confidence  to  an  institution  of  this 
nature,  it  appears  to  be  an  essential  ingredient  in  its  structure,  that  it  shall  be 


790.] 


SECRETARY  OF  THE  TREASURY.  74 


under  a  private  not  a  public  direction — under  the  guidance  of  individual 
interest,  not  of  public  policy;  which  would  be  supposed  to  be,  and  in  cer- 
tain emergencies,  under  a  feeble  or  too  sanguine  administration,  would  real- 
ly be,  liable  to  being  too  mueh  influenced  by  public  necessity.  The  sus- 
picion of  this  would  most  probably  be  a  canker  that  would  continually  corrode 
the  vitals  of  the  credit  of  the  bank,  and  would  be  most  likely  to  prove  fatal 
in  those  situations  in  which  tbe  public  good  would  require  that  they  should 
be  most  sound  and  vigorous.  It  would,  indeed,  be  little  less  than  a  mira- 
cle, should  the  credit  of  the  bank  be  at  the  disposal  of  the  government,  if, 
in  a  long  series  of  time,  there  was  not  experienced  a  calamitous  abuse  of  it. 
It  is  true,  that  it  would  be  the  real  interest  of  the  government  not  to  abuse 
it;  its  genuine  policy  to  husband  and  cherish  it  with  the  most  guarded  circum- 
spection, as  an  inestimable  treasure.  But  what  government  ever  uniformly 
consulted  its  true  interests  in  opposition  to  the  temptations  of  momentary 
exigencies?  What  nation  was  ever  blessed  with  a  constant  succession  of 
upright  and  wise  administrators? 

The  keen,  steady,  and,  as  it  were,  magnetic  sense  of  their  own  interest  as 
proprietors,  in  the  directors  of  a  bank,  pointing  invariably  to  its  true  pole, 
the  prosperity  of  the  institution  is  the  only  security  that  can  always  be  re- 
lied upon  for  a  careful  and  prudent  administration.  It  is,  therefore,  theonly 
basis  on  which  an  enlightened,  unqualified,  and  permanent  confidence  can 
be  expected  to  be  erected  and  maintained. 

The  precedents  of  the  banks  established  in  several  cities  of  Europe,  Am- 
sterdam, Hamburgh,  and  others,  may  seem  to  militate  against  this  position. 
Without  a  precise  knowledge  of  all  the  peculiarities  of  their  respective  con- 
stitutions, it  is  difficult  to  pronounce  how  far  this  may  be  the  case.  That  of 
Amsterdam,  however,  which  we  best  know,  is  rather  under  a  municipal  than 
a  governmental  direction.  Particular  magistrates  of  the  city,  not  officers  of 
the  republic,  have  the  management  of  it.  It  is  also  a  bank  of  deposite,  not 
of  loan,  or  circulation ;  consequently  less  liable  to  abuse,  as  well  as  less  useful. 
Its  general  business  consists  in  receiving  money  for  safe  keeping,  which,  if 
not  called  for  within  a  certain  time,  becomes  a  part  of  its  stock,  and  irre- 
claimable. But  a  credit  is  given  for  it  on  the  books  of  the  bank,  which,  being 
transferable,  answers  all  the  purposes  of  money. 

The  directors  being  magistrates  of  the  city,  and  the  stockholders  in  general 
its  most  influential  citizens,  it  is  evident  that  the  principle  of  private  interest 
must  be  prevalent  in  the  management  of  the  bank.  And  it  is  equally  evi- 
dent, that,  from  the  nature  of  its  operations,  that  principle  is  less  essential  to 
it  than  to  an  institution  constituted  with  a  view  to  the  accommodation  of  the 
public  and  individuals,  by  direct  loans  and  a  paper  circulation. 

As  far  as  may  concern  the  aid  of  the  bank,  within  the  proper  limits,  a 
good  government  has  nothing  more  to  wish  for  than  it  will  always  possess, 
though  the  management  be  in  the  hands  of  private  individuals  As  the  in- 
stitution, if  rightly  constituted,  must  depend  for  its  renovation,  from  time  to 
time,  on  the  pleasure  of  the  government,  it  will  not  be  likely  to  feel  a  dis- 
position to  render  itself,  by  its  conduct,  unworthy  of  public  patronage.  The 
government,  too,  in  the  administration  of  its  finances,  has  it  in  its  power  to 
reciprocate  benefits  to  the  bank,  of  not  less  importance  than  those  which  the 
bank  affords  to  the  government,  and  which,  besides,  are  never  unattended 
with  an  immediate  and  adequate  compensation.  Independent  of  these  more 
particular  considerations,  the  natural  weight  and  influence  of  a  good  govern- 
ment will  always  go  far  towards  procuring  a  compliance  with  its  desires; 


REPORTS  OF  THE 


[1790. 


and,  as  the  directors  will  usually  be  composed  of  some  of  the  most  discreet, 
respectable,  and  well  informed  citizens,  it  can  hardly  ever  be  difficult  to 
make  them  sensible  of  the  force  of  the  inducements  which  ought  to  stimulate 
their  exertions. 

It  will  not  follow,  from  what  has  been  said,  that  the  State  may  not  be  the 
holder  of  a  part  of  the  stock  of  a  bank,  and  consequently  a  sharer  in  the 
profits  of  it.  It  will  only  follow  that  it  ought  not  to  desire  any  participation 
in  the  direction  of  it,  and  therefore  ought  not  to  own  the  whole  or  a  princi- 
pal part  of  the  stock:  for,  if  the  mass  of  the  property  should  belong  to  the 
public,  and  if  the  direction  of  it  should  be  in  private  hands,  this  would  be  to 
commit  the  interests  of  the  State  to  persons  not  interested,  or  not  enough  in- 
terested in  their  proper  management. 

There  is  one  thing,  however,  which  the  government  owes  to  itself  and  to 
the  community^ — at  least  to  all  that  part  of  it  who  are  not  stockholders — 
which  is,  to  reserve  to  itself  a  right  of  ascertaining,  as  often  as  may  be  neces- 
sary, the  state  of  the  bank — excluding,  however,  all  pretension  to  control. 
This  right  forms  an  article  in  the  primitive  constitution  of  the  bank  of  North 
America;  and  its  propriety  stands  upon  the  clearest  reasons.  If  the  paper 
of  a  bank  is  to  be  permitted  to  insinuate  itself  into  ail  the  revenues  and  re- 
ceipts of  a  country;  if  it  is  even  to  be  tolerated  as  the  substitute  for  gold  and 
silver  in  ail  the  transactions  of  business,  it  becomes,  in  either  view,  a  national 
concern  of  the  first  magnitude.  As  such,  the  ordinary  rules  of  prudence  re- 
quire that  the  government  should  possess  the  means  of  ascertaining,  when- 
ever it  thinks  fit,  that  so  delicate  a  trust  is  executed  with  fidelity  and  care. 
A  right  of  this  nature  is  not  only  desirable,  as  it  respects  the  government, 
but  it  ought  to  be  equally  so  to  all  those  concerned  in  the  institution,  as  an 
additional  title  to  public  and  private  confidence,  and  as  a  thing  which  can 
only  be  formidable  to  practices  that  imply  mismanagement.  The  presump- 
tion must  always  be,  that  the  characters  who  would  be  intrusted  with  the 
exercise  of  this  right  on  behalf  of  the  government,  will  not  be  deficient  in 
the  discretion  which  it  may  require;  at  least  the  admitting  of  this  presump- 
tion cannot  be  deemed  too  great  a  return  of  confidence  for  that  very  large 
portion  of  it  which  the  government  is  required  to  place  in  the  bank. 

Abandoning,  therefore,  ideas  which,  however  agreeable,  or  desirable,  are 
neither  practicable  nor  safe,  the  following  plan,  for  the  constitution  of  a  na- 
tional bank,  is  respectfully  submitted  to  the  consideration  of  the  House.    . 

1.  The  capital  stock  of  the  bank  shall  not  exceed  ten  millions  of  dollars, 
divided  into  twenty  five  thousand  shares,  each  share  being  four  hundred  dol- 
lars; to  raise  which  sum  subscriptions  shall  be  opened  on  the  first  Monday  of 
April  next,  and  shall  continue  open  until  the  whole  shall  be  subscribed. 
Bodies  politic  as  well  as  individuals  may  subscribe. 

2.  The  amount  of  each  share  shall  be  payable,  one-fourth  in  gold  and  sil- 
ver coin,  and  three-fourths  in  that  part  of  the  public  debt  which,  according 
to  the  loan  proposed  by  the  act  making  provision  for  the  debt  of  the  United 
States,  she.  bear  an  accruing  interest  at  the  time  of  payment  of  six  per  centum 
per  annum. 

3.  The  respective  sums  subscribed  shall  be  payable  in  four  equal  parts,  as 
well  specie  as  debt,  in  succession,  and  at  the  distance  of  six  calendar  months 
from  each  other;  the  first  payment  to  be  made  at  the  time  of  subscription. 
If  there  shall  be  a  failure  in  any  subsequent  payment,  the  party  failing  shall 
lose  the  benefit  of  any  dividend  which  may  have  accrued  prior  to  the  time 
for  making  such  payment,  and  during  the  delay  of  the  same. 


if  90.1       SECRETARY  OF  THE  TREASURY.  73 

4.  The  subscribers  to  the  bank,  and  their  successors,  shall  be  incorporated, 
and  shall  so  continue  until  the  final  redemption  of  that  part  of  its  stock  which 
shall  consist  of  the  public  debt. 

5.  The  capacity  of  the  corporation  to  hold  real  and  personal  estate,  shall 
be  limited  to  fifteen  millions  of  dollars,  including  the  amount  of  its  capital  or 
original  stock.  The  lands  and  tenements  which  it  shall  be  permitted  to 
hold,  shall  be  only  such  as  shall  be  requisite  for  the  immediate  accommoda- 
tion of  the  institution;  and  such  as  shall  have  been  bona  fide  mortgaged  to  it 
by  way  of  security,  or  conveyed  to  it  in  satisfaction  of  debts  previously  con- 
tracted, in  the  usual  course  of  its  dealings,  or  purchased  at  sales  upon  judg- 
ments which  shall  have  been  obtained  for  such  debts. 

6.  The  totality  of  the  debts  of  the  company,  whether  by  bond,  bill,  note, 
or  other  contract,  (credits  for  deposites  excepted,)  shall  never  exceed  the 
amount  of  its  capital  stock.  In  case  of  excess,  the  directors,  under  whose 
administration  it  shall  happen,  shall  be  liable  for  it  in  their  private  or  sepa- 
rate capacities.  Those  who  may  have  dissented  may  excuse  themselves  from 
this  responsibility  by  immediately  giving  notice  of  the  fact,  and  their  dis- 
sent, to  the  President  of  the  United  States,  and  to  the  stockholders,  at  a  ge- 
neral meeting,  to  be  called  by  the  President  of  the  bank,  at  their  request. 

7.  The  company  may  sell  or  demise  its  lands  and  tenements,  or  may  sell 
the  whole  or  any  part  of  the  public  debt,  whereof  its  stock  shall  consist;  but 
shall  trade  in  nothing,  except  bills  of  exchange,  gold  and  silver  bullion,  or 
in  the  sale  of  goods  pledged  for  money  lent;  nor  shall  take  more  than  at  the 
rate  of  six  per  centum  per  annum,  upon  its  loans  or  discounts. 

8.  No  loan  shall  be  made  by  the  bank  for  the  use  or  on  account  of  the  go- 
vernment of  the  United  States,  or  of  either  of  them,  to  an  amount  exceeding- 
fifty  thousand  dollars,  or  of  any  foreign  prince  or  state,  unless  previously  au- 
thorized by  a  law  of  the  United  States. 

9.  The  stock  of  the  bank  shall  be  transferable,  according  to  such  rules  as 
shall  be  instituted  by  the  company  in  that  behalf. 

10.  The  affairs  of  the  bank  shall  be  under  the  management  of  twenty-five 
directors,  one  of  whom  shall  be  the  President;  and  there  shall  be,  on  the 
first  Monday  of  January,  in  each  year,  a  choice  of  directors,  by  a  plurality  of 
suffrages  of  the  stockholders,  to  serve  for  a  year.  The  directors,  at  their 
first  meeting  after  each  election,  shall  choose  one  of  their  number  as  President 

11.  The  number  of  votes  to  which  each  stockholder  shall  be  entitled  shall 
be  according  to  the  number  of  shares  he  shall  hold,  in  the  proportions  fol- 
lowing— that  is  to  say:  For  one  share,  and  not  more  than  two  shares,  one 
vote;  for  every  two  shares  above  two,  and  not  exceeding  ten,  one  vote;  for 
every  four  shares  above  ten,  and  not  exceeding  thirty,  one  vote;  for  every 
six  shares  above  thirty,  and  not  exceeding  sixty,  one  vote;  for  every  eight 
shares  above  sixty,  and  not  exceeding  one  hundred,  one  vote;  and  for  every 
ten  shares  above  one  hundred,  one  vote:  but  no  person,  co-partnership,  or 
body  politic,  shall  be  entitled  to  a  greater  number  than  thirty  votes.  And, 
after  the  first  election,  no  share  or  shares  shall  confer  a  right  of  suffrage, 
which  shall  not  have  been  holden  three  calendar  months  previous  to  the  day 
of  election.  Stockholders  actually  resident  within  the  United  States,  and 
none  other,  may  vote  in  the  elections  by  proxy. 

12.  Not  more  than  three-fourths  of  the  directors  in  office,  exclusive  of  the 
President,  shall  be  eligible  for  the  next  succeeding  year.  But  the  director 
^vho  shall  be  President  at  the  time  of  an  election  may  always  be  re-elected . 


-^4  REPORTS  OF  THE  [1790. 

13.  None  but  a  stockholder,  being  a  citizen  of  the  United  States,  shall  be 
eligible  as  a  director. 

14.  Any  number  of  stockholders  not  less- than  sixty,  who  together  shall 
foe  proprietors  of  two  hundred  shares  or  upwards,  shall  have  power  at  any 
time  to  call  a  general  meeting  of  the  stockholders,  for  purposes  relative  to 
the  institution;  giving  at  least  six  weeks  notice  in  two  public  gazettes  of  the 
place  where  the  bank  is  kept,  and  specifying  in  such  notice  the  object  of  the 
meeting. 

15.  In  case  of  the  death,  resignation,  absence  from  the  United  States,  or- 
removal  of  a  director  by  the  stockholders,  his  place  may  be  filled  by  a  new 
choice  for  the  remainder  of  the  year. 

16.  No  director  shall  be  entitled  to  any  emolument,  unless  the  same  shall 
have  been  allowed  by  the  stockholders  at  a  general  meeting.  The  stock- 
holders shall jmake  such  compensation  to  the  President,  for  his  extraordinary 
attendance  at  the  bank,  as  shall  appear  to  them  reasonable. 

17.  Not  less  than  seven  directors  shall  constitute  a  Board  for  the  transac- 
tion of  business. 

18.  Every  cashier  or  treasurer,  before  he  enters  on  the  duties  of  his  office, 
shall  be  required  to  give  bond,  with  two  or  more  sureties,  to  the  satisfaction 
of  the  directors,  in  a  sum  not  less  than  twenty  thousand  dollars,  with  con- 
dition for  his  good  behaviour. 

19.  Half-yearly  dividends  shall  be  made  of  so  much  of- the  profits  of  the 
bank,  as  shall  appear  to  the  directors  adviseable.  And  once  in  every  three 
years,  the  directors  shall  lay  before  the  stockholders,  at  a  general  meeting, 
for  their  information,  an  exact  and  particular  statement  of  the  debts  which 
shall  have  remained  unpaid,  after  the  expiration  of  the  original  credit,  for 
a  period  of  treble  the  term  of  that  credit,  and  of  the  surplus  of  profit,  if  any, 
after  deducting  losses  and  dividends. 

20.  The  bills  and  notes  of  the  bank  orginally  made  payable,  or  which 
shall  have  become  payable  on  demand  in  gold  and  silver  coin,  shall  be  re- 
ceivable in  all  payments  to  the  United  States. 

21.  The  officer  at  the  head  of  the  Treasury  Department  of  the  United 
States,  shall  be  furnished,  from  time  to  time,  as  often  as  he  may  require,  not 
exceeding  once  a  week,  with  statements  of  the  amount  of  the  capital  stock 
of  the  bank,  and  of  the  debts  due  to  the  same,  of  the  moneys  deposited 
therein,  of  the  notes  in  circulation,  and  of  the  cash  in  hand;  and  shall  have  a 
right  to  inspect  such  general  accounts  in  the  books  of  the  bank,  as  shall  re- 
late to  the  said  statements;  provided  that  this  shall  not  be  construed  to  imply 
a  right  of  inspecting  the  account  of  any  private  individual  or  individuals, 
with  the  bank. 

22.  No  similar  institution  shall  be  established  by  any  future  act  of  the 
United  States,  during  the  continuance  of  the  one  hereby  proposed  to  be  es- 
tablished. 

23.  It  shall  be  lawful  for  the  directors  of  the  bank,  to  establish  offices 
wheresoever  they  shall  think  fit,  within  the  United  States,  for  the  purposes 
of  discount  and  deposite,  only,  and  upon  the  same  terms,  and  in  the  same 
manner,  as  shall  be  practised  at  the  bank,  and  to  commit  the  management 
of  the  said  offices,  and  the  making  of  the  said  discounts,  either  to  agents 
specially  appointed  by  them,  or  to  such  persons  as  may  be  chosen  by  the 
stockholders  residing  at  the  place  where  any  such  office  shall  be,  under  such 
agreements,  and  subject  to  such  regulations  as  they  shall  deem  proper,  not 
being  contrarv  to  law,  or  to  the  constitution  of  the  bank. 


1790.] 


SECRETARY  OF  THE  TREASURY. 


24.  And  lastly,  the  President  of  the  United  States  shall  be  authorized  to 
cause  a  subscription  to  be  made  to  the  stock  of  the  said  company,  on  behalf 
of  the  United  States,  to  an  amount  not  exceeding  two  millions  of  dollars,  to 
be  paid  out  of  the  moneys  which  shall  be  borrowed  by  virtue  of  either  of 
the  acts,  the  one  entitled  "An  act  making  provision  for  the  debt  of  the 
United  States,"  and  the  other,  entitled  "An  act  making  provision  for  the 
reduction  of  the  public  debt;"  borrowing  of  the  bank  an  equal  sum,  to 
be  applied  to  the  purposes  for  which  the  said  moneys  shall  have  been  pro- 
cured, reiinburseable  in  ten  years  by  equal  annual  instalments;  or  at  any  time 
sooner,  or  in  any  greater  proportions,  that  the  government  may  think  fit. 

The  reasons  for  the  several  provisions  contained  in  the  foregoing  plan, 
have  been  so  far  anticipated,  and  will  for  the  most  part  be  so  readily  suggest- 
ed by  the  nature  of  those  provisions,  that  any  comments  which  need  further 
be  made,  will  be  both  few  and  concise. 

The  combination  of  a  portion  of  the  public  debt,  in-the  formation  of  the 
capital,,  is  the  principal  thing  of  which  an  explanation  is  requisite.  The 
chief  object  of  this  is  to  enable  the  creation  of  a  capital  sufficiently  large 
to  be  the  basis  of  an  extensive  circulation,  and  an  adequate  security  for  it. 
As  has  been  elsewhere  remarked,  the  original  plan  of  the  bank  of  North 
America  contemplated  a  capital  of  ten  millions  of  dollars,  which  is  certainly 
not  too  broad  a  foundation  for  the  extensive  operations  to  which  a  national 
bank  is  destined.  But  to  collect  such  a  sum  in  this  country  in  gold  and 
silver,  into  one  depository,  may,  without  hesitation,  be  pronounced  imprac- 
ticable. Hence  the  necessity  of  an  auxiliary,  which  the  public  debt  at 
once  presents. 

This  part  of  the  fund  will  be  always  ready  to  come  in  aid  of  the  specie; 
it  will  more  and  more  command  a  ready  sale;  and  can  therefore  expedi- 
tiously be  turned  into  coin,  if  an  exigency  of  the  bank  should  at  any  time 
require  it.  This  quality  of  prompt  convertibility  into  coin,  renders  it  an  equi- 
valent for  that  necessary  agent  of  bank  circulation,  and  distinguishes  it  from 
a  fund  in  land,  of  which  the  sale  would  generally  be  far  less  compendious, 
and  at  great  disadvantage.  The  quarter  yearly  receipts  of  interest  will  also 
be  an  actual  addition  to  the  specie  fund,  during  the  intervals  between  them 
and  the  half  yearly  dividends  of  profits.  The  objection  to  combining  land 
with  specie,  resulting  from  their  not  being  generally  in  possession  of  the 
same  person's,  does  not  apply  to  the  debt,  which  will  always  be  found  in 
considerable  quantity  among  the  monied  and  trading  people. 

The  debt  composing  part  of  the  capital,  besides  its  collateral  effect  in 
enabling  the  bank  to  extend  its  operations,  and  consequently  to  enlarge  its 
profits,  will  produce  a  direct  annual  revenue  of  six  per  centum  from  the  go- 
vernment, which  will  enter  into  the  half  yearly  dividends  received  by  the 
stockholders. 

When  the  present  price  of  the  publie  debt  is  considered,  and  the  effect 
which  its  conversion  into  bank  stock,  incorporated  with  a  specie  fund,  would 
in  all  probability  have  to  accelerate  its  rise  to  the  proper  point,  it  will  easily 
be  discovered  that  the  operation  presents,  in  its  outset,  a  very  considerable 
advantage  to  .those  who  may  become  subscribers;  and  from  the  influence 
which  that  rise  would  have  on  the  general  mass  of  the  debt,  a  proportional 
benefit  to  all  the  public  creditors,  and,  in  a  sense  which  has  been  more  than 
once  adverted  to — to  the  community  at  large. 

There  is  an  important  fact  which  exemplifies  the  fitness  of  the  public 
iebt  for  a  bank  fund,  and  which  rnav  serve  to  remove  doubts  in  some  minds 
U 


^g  REPORTS  OF  THE  [1790. 

on  this  point:  it  is  this,  that  the  bank  of  England,  in  its  first  erection,  rested 
wholly  on  that  foundation.  The  subscribers  to  a  loan  to  government  of  one 
million  two  hundred  thousand  pounds  sterling,  were  incorporated  as  a  bank, 
of  which  the  debt  created  by  the  loan  and  the  interest  upon  it,  were  the  sole 
fund.  The  subsequent  augmentations  of  its  capital,  which  now  amounts  to 
"between  eleven  and  twelve  millions  of  pounds  sterling,  have  been  of  the 
Same  nature. 

The  confining  of  the  right  of  the  bank  to  contract  debts  to  the  amount 
<©f  its  capital,  is  an  important  precaution,  which  is  not  to  be  found  in  the  con- 
stitution of  the  bank  of  North  America,  and  which,  while  the  fund  consists 
wholly  of  coin, would  be  a  restriction  attended  with  inconveniences;but  would 
be  free  from  any?  if  the  composition  of  it  should  be  such  as  is  now  proposed. 
The  restriction  exists  in  the  establishment  of  the  bank  of  England,  and  as 
a  source  of  security  is  worthy  of  imitation.  The  consequence  of  exceed- 
ing the  limit  there  is,  that  each  stockholder  is  liable  for  the  excess,  in  pro- 
portion to  his  interest  in  the  bank.  When  it  is  considered  that  the  direc- 
tors owe  their  appointments  to  the  choice  of  the  stockholders,  a  response- 
bility  of  this  kind  on  the  part  of  the  latter  does  not  appear  unreasonable; 
but,  on  the  other  hand,  it  may  be  deemed  a  hardship  upon  those  who  may 
have  dissented  from  the  choice.  And  there  are  many  among  us,  whom  it 
might  perhaps  discourage  from  becoming  concerned  in  the  institution.  These 
reasons  have  induced  the  placing  of  the  responsibility  upon  the  directors, 
jby  whom  the  limit  prescribed  should  be  transgressed. 

The  interdiction  of  loans  on  account  of  the  United  States,  or  of  any  par- 
ticular State,  beyond  the  moderate  sum  specified,  or  of  any  foreign  power, 
will  serve  as  a  barrier  to  executive  encroachments,  and  to  combinations  in- 
auspicious to  the  safety,  or  contrary  to  the  policy  of  the  Union. 

The  limitation  of  the  rate  of  interest  is  dictated  by  the  consideration,  that 
different  rates  prevail  in  different  parts  of  the  Union;  and  as  the  operations 
of  the  bank  may  extend  through  the  whole,  some  rule  seems  to  be  neces- 
sary. There  is  room  for  a  question,  whether  the  limitation  ought  not 
rather  to  be  to  five,  than  to  six  per  cent,  as  proposed.  It  may  with  safety 
be  taken  for  granted,  that  the  former  rate  would  yield  an  ample  dividend, 
perhaps  as  much  as  the  latter,  by  the  extension  which  it  would  give  to  busi- 
ness. The  natural  effect  of  low  interest  is  to  increase  trade  and  industry; 
because  undertakings  of  every  kind  can  be  prosecuted  with  greater  advan- 
tage. This  is  a  truth  generally  admitted;  but  it  is  requisite  to  have  ana- 
lyzed the  subject  in  all  its  relations,  to  be  able  to  form  a  just  conception  of 
the  extent  of  that  effect.  Such  an  analysis  cannot  but  satisfy  an  intelligent 
mind,  that  the  difference  of  one  per  cent,  in  the  rate  at  which  money  may 
be  had,  is  often  capable  of  making  an  essential  change  for  the  better  in  the 
situation  of  any  country  or  place, 

Every  thing,  therefore,  which  tends  to  lower  the  rate  of  interest,  is  pecu- 
liarly worthy  of  the  cares  of  legislators.  And  though  laws  which  violently 
sink  the  legal  rate  of  interest  greatly  below  the  market  level,  are  not  to  be 
commended,  because  they  are  not  calculated  to  answer  their  aim;  yet  what- 
ever has  a  tendency  to  effect  a  reduction,  without  violence  to  the  natural 
course  ot  things,  ought  to  be  attended  to  and  pursued.  Banks  are  among 
the  means  most  proper  to  accomplish  this  end;  and  the  moderation  of  the 
rate  at  which  their  discounts  are  made,  is  a  material  ingredient  towards  it; 
with  which  their  own  interest,  viewed  on  an  enlarged  and  permanent  scale, 
$pes  not  appear  to  clash. 


1790.] 


SECRETARY  OF  THE  TREASURY*  77 


But,  as  the  most  obvious  ideas  are  apt  to  have  greater  force  than  those 
which  depend  on  complex  and  remote  combinations,  there  would  be  danger, 
that  the  persons  whose  funds  must  constitute  the  stock  of  the  bank,  would 
be  diffident  of  the  sufficiency-  of  the  profits  to  be  expected  j  if  the  rate  of 
loans  and  discounts  were  to  be  placed  below  the  point  to  which  they  have 
been  accustomed;  and  might,  on  this  account,  be  indisposed  to  embarking 
in  the  plan.  There  is,  it  is  true,  one  reflection,  which  in  regard  to  men  ac= 
tually  engaged  in  trade,  ought  to  be  a  security  against  this  danger;  it  is  this — < 
That  the  accommodations  which  they  might  derive  in  the  way  of  their  bu- 
siness, at  a  low  rate,  would  more  than  indemnify  them  for  any  difference 
in  the  dividend;  supposing  even  that  some  diminution  of  it  were  to  be  the 
eonsequence.  But,  upon  the  whole,  the  hazard  of  contrary  reasoning  among 
the  mass  of  monied  men,  is  a  powerful  argument  against  the  experiment. 
The  institutions  of  the  kind  already  existing,  add  to  the  difficulty  of  making 
it.  Mature  reflection,  and  a  large  capital,  may,  of  themselves,  lead  to  the 
desired  end. 

The  last  thing  which  requires  any  explanatory  remark,  is,  the  authority 
proposed  to  be  given  to  the  President  to  subscribe  to  the  amount  of  two  mil- 
lions of  dollars  on  account  of  the  public.  The  main  design  of  this  is  to 
enlarge  the  specie  fund  of  the  bank,  and  to  enable  it  to  give  a  more  early 
extension  to  its  operations.  Though  it  is  proposed  to  borrow  with  one  hand 
what  is  lent  with  the  other,  yet  the  disbursement  of  what  is  borrowed  will 
be  progressive,  and  bank  notes  may  be  thrown  into  circulation  instead  of 
the  gold  and  silver.  Besides,  there  is  to  be  an  annual  reimbursement  of  a 
part  of  the  sum  borrowed,  which  will  finally  operate  as  an  actual  investment 
of  so  much  specie.  In  addition  to  the  inducements  to  this  measure,  which 
result  from  the  general  interest  of  the  government  to  enlarge  the  sphere  of 
the  utility  of  the  bank,  there  is  this  more  particular  consideration;  to  wit: 
that  as  far  as  the  dividend  on  the  stock  shall  exceed  the  interest  paid  on  the 
loan,  there  is  a  positive  profit. 

The  Secretary  begs  leave  to  conclude  with  this  general  observation:  That 
if  the  bank  of  North  America  shall  come  forward  with  any  propositions  which 
have  for  their  object  the  ingrafting  upon  that  institution  the  characteristics 
which  shall  appear  to  the  Legislature  necessary  to  the  due  extent  and  safety 
of  a  national  bank,  there  are,  in  his  judgment,  weighty  inducements  to  giving 
every  reasonable  facility  to  the  measure.  Not  only  the  pretensions  of  that 
institution,  from  its  original  relation  to  the  government  of  the  United  States? 
and  from  the  services  it  has  rendered,  are  such  as  to  claim  a  disposition 
favorable  to  it,  if  those  who  are  interested  in  it  are  willing,  on  their  part-, 
to  place  it  on  a  footing  satisfactory  to  the  government,  and  equal  to  the  pur- 
poses of  a  bank  of  the  United  States,  but  its  co-operation  would  materially 
accelerate  the  accomplishment  of  the  great  object;  and  the  collision,  which 
might  otherwise  arise,  might,  in  a  variety  of  ways,  prove  equally  disagree- 
able and  injurious.  The  incorporation  or  union  here  contemplated,  may  be 
effected  in  different  modes,  under  the  auspices  of  an  act  of  the  United  States, 
if  it  shall  be  desired  by  the  bank  of  North  America,  upon  terms  which  shall 
appear  expedient  to  the  government. 

All  which  is  humbly  submitted. 

ALEXANDER  HAMILTON, 

^Secretary  of  the  Treasury* 


7S  REPORTS  OF  THE  [I79f. 


REPORT  ON  MANUFACTURES, 


December  5th,  179I» 
The  Secretary  of  the  Treasury,  in  obediencz  to  the  order  of  the  House 
of  Representatives,  of  the  1 5th  day  of  January,  1790,  has  applied 
his  attention,  at  as  early  a  period  as  his  other  duties  would  permit, 
to  the  subject  of  Manufactures;  and  particularly  to  the  means  of 
promoting— such  as  will  tend  to  render  the  United  States  independent 
on  foreign  nations,  for  military  and  other  essential  supplies: 

And  he  thereupon  respectfully  submits  the  following 

REPORT: 

The  expediency  of  encouraging  manufactures  in  the  United  States,  which 
was  not  long  since  deemed  very  questionable,  appears  at  this  time  to  be  pretty" 
generally  admitted.-  The  embarrassments  which  have  obstructed  the  pro- 
gress of  our  external  trade,  have  led  to  serious  reflections  on  the  necessity 
of  enlarging  the  sphere  of  oar  domestic  commerce.  The  restrictive  regu- 
lations, which,-  in  foreign  markets  abridge  the  vent  of  the  increasing  surplus 
of  our  agricultural  produce,,  serve  to  beget  an  earnest  desire,  that  a  more  ex- 
tensive demand  for  that  surplus  may  be  created  at  homeland  the  complete 
success  which  has  rewarded  manufacturing  enterprise,  in  some  valuable 
Branches,  conspiring  with  the  promising  symptoms  which  attend  some  less 
mature  essays  in  others,  justify  a  hope,  that  the  obstacles  to  the  growth  of 
this  species  of  industry,  are  less  formidable  than  they  were  apprehended  to 
be;  and  that  it  is  not  difficult  to  find,  in  its  further  extension,  a  full  indemni- 
fication for  any  external  disadvantages,  which  are  or  may  be  experienced,, 
as  well  as  an  accession  of  resources,  favorable  to  national  independence  and; 
(safety. 

There- still  are,  nevertheless,  respectable  patrons  of  opinions  unfriendly 
to  the  encouragement  of  manufactures.  The  following  are,  substantially, 
the  arguments  by  which  these  opinions  are  defended. 

"  In  every  country,  (say  those  who  entertain  them,)  agriculture  is  the 
most  beneficial  and  productive  object  of  human  industry.  This  position, 
generally,  if  not  universally  true,  applies  with  peculiar  emphasis  to  the; 
United  States,  on  account  of  their  immense  tracts  of  fertile  territory,  unin- 
habited and  unimproved.  Nothing  can  afford  so  advantageous  an  employ- 
ment for  capital  and  labor,  as  the  conversion  of  this  extensive  wilderness 
into  cultivated  farms.  Nothing,  equally  with  this,  can  contribute  to  the  popu- 
lation, strength,  and  real  riches  of  the  country. 

"To  endeavor,  by  the  extraordinary  patronage  of  government,  to  accele- 
rate the  growth  of  manufactures,  is,  in  fact,  to  endeavor  by  force  and  art,  to- 
transfer  the  natural  .current  of  industry,  from  a  more  to  a  less  beneficial 
channel.  Whatever  has  such  a  tendency,  must^ necessarily  be  unwise;  in- 
deed, it  can  hardly  ever  be  wise  in  a  government  to  attempt  to  give  a  di- 
rection to  the  industry  of  its  citizens.  This,  under  the  quicksighted  guidance 
of  private  interest,  will,  if  left  to  itself,  infallibly  find  its  own  way  to  the 
most  profitable  employment;  and  it  is  by  such  employment  that  the  public 


£791.]  SECRETARY  OF  THE  TREASURY.  79 

prosperity  will  be  most  effectually  promoted.     To  leave  industry  to  itself,, 
therefore,  is,  in  almost  every  case,  the  soundest  as  well  as  the  simplest  policy. 

"This  policy  is  not  only  recommended  to  the  United  States,  by  conside- 
rations which  affect  all  nations;  it  is,  hi  a  manner,  dictated  to  them  by  the 
imperious  force  of  a  very  peculiar  situation.  The  smallness  of  their  popu- 
lation compared  with  their  territory,  the  constant  allurements  to  emigration 
from  the  settled  to  the  unsettled  parts  of  the  country;  the  facility  with  which 
the  less  independent  condition  of  an  artisan  can  be  exchanged,  for  the  more 
independent  condition  of  a  farmer;  these,  and  similar  causes,  conspire  to 
produce,  and  for  a  length  of  time  must  continue  to  occasion,  a  scarcity  of 
hands  for  manufacturing  occupation,  and  dearness  of  labor  generally.  To 
these  disadvantages  for  the  prosecution  of  manufactures,  a  deficiency  of  pe- 
cuniary capital  being  added,  the  prospect  of  a  successful  competition  with 
the  manufactures  of  Europe,  must  be  regarded  as  little  less  than  desperate. 
Extensive  manufactures  can  only  be  the  offspring  of  a  redundant,  at  least  of 
a  full  population.  Till  the  latter  shall  characterize  the  situation  of  this 
country,  it  is  vain  to  hope  for  the  former. 

"  If,  contrary  to  the  natural  course  of  things,  an  unseasonable  and  prema- 
ture spring  can  be  given  to  certain  fabrics,  by  heavy  duties,  prohibitions, 
bounties,  or  by  other  forced  expedients,  this  will  only  be  to  sacrifice  the 
interests  of  the  community  to  those  of  particular  classes.  Besides  the  mis- 
direction of  labor,  a  virtual  monopoly  will  be  given  to  the  persons  employed 
on  such  fabrics;  and  an  enhancement  of  price,  the  inevitable  consequence  of 
every  monopoly,  must  be  defrayed  at  the  expense  of  the  other  parts  of  the 
society.  It  is  far  preferable,  that  those  persons  should  be  engaged  in  the 
cultivation  of  the  earth;  and  that  we  should  procure,  in  exchange  for  its 
productions,  the  commodities,  with  which  foreigners  are  able  to  supply  us 
in  greater  perfection,  and  upon  better  terms/' 

This  mode  of  reasoning  is  founded  upon  facts  and  principles,  which  have 
certainly  respectable  pretensions.  If  it  had  governed  the  conduct  of  nations- 
more  generally  than  it  has  done,  there  is  room  to  suppose  that  it  might  have 
carried  them  faster  to  prosperity  and  greatness,  than  they  have  attained  by 
the  pursuit  of  maxims  too  widely  opposite.  Most  general  theories,  however.,,, 
admit  of  numerous  exceptions,  and  there  are  few,  if  any,  of  the  political' 
kind,  which  do  not  blend  a  considerable  portion  of  error  with  the  truths 
they  inculcate. 

In  order  to  an  accurate  judgment,  how  far  that  which  has  been  just  stated'^ 
ought  to  be  deemed  liable  to  a  similar  imputation,  it  is  necessary  to  advert 
carefully  to  the  considerations  which  plead  in  favor  of  manufactures,  and 
which  appear  to  recommend  the  special  and  positive  encouragement  of 
them  in  certain  cases,  and  under  certain  reasonable  limitations. 

It  ought  readily  to  be  conceded,  that  the  cultivation  of  the  earth,  as  the 
primary  and  most  certain  source  of  national  supply;  as  the  immediate  and 
chief  source  of  subsistence  to  man;  as  the  principal  source  of  those  materials 
which  constitute  the  nutriment  of  other  kinds  of  labor;  as  including  a  state 
most  favorable  to  the  freedom  and  independence  of  the  human  mind;  one? 
perhaps,  most  conducive  to  the  multiplication  of  the  human  species,  has  in- 
trinsically a  strong  claim  to  pre-eminence  over  every  other  kind  of  industry. 

But  that  it  has  a  title  to  any  thing  like  an  exclusive  predilection,  in  any- 
country,  ought  to  be  admitted  with  great  caution;  that  it  is  even  more 
productive  than  every  other  branch  of  industry,  requires  more  evidence  than 
lias  yet  been  given  in  support  of  the  position,     That  its  real  interests,  pre- 


SO  REPORTS  OF  THE  [179L 

cious  and  important  as,  without  the  help  of  exaggeration,  they  truly  are,  will 
be  advanced  rather  than  injured,  by  the  due  encouragement  of  manufactures, 
may,  it  is  believed,  be  satisfactorily  demonstrated.  And  it  is  also  believed, 
that  the  expediency  of  such  encouragement,  in  a  general  view,  may  be  shown 
to  be  recommended  by  the  most  cogent  and  persuasive  motives  of  national 
policy. 

It  has  been  maintained,  that  agriculture  is  not  only  the  most  productive, 
but  the  only  productive  species  of  industry.  The  reality  of  this  suggestion, 
in  either  respect,  has,  however,  not  been  verified  by  any  accurate  uelaii  of 
facts  and  calculations,  and  the  general  arguments  which  are  adduced  to  prove 
it,  are  rather  subtile  and  paradoxical,  than  solid  or  convincing. 

Those  which  maintain  its  exclusive  productiveness,  are  to  this  effect: — 

Labor  bestowed  upon  the  cultivation  of  land,  produces  enough  not  only 
to  replace  all  the  necessary  expenses  incurred  in  the  business,  and  to  main- 
tain the  persons  who  are  employed  in  it,  but  to  afford,  together  with  the 
ordinary  profit  on  the  stock  or  capital  of  the  farmer,  a  nett  surplus  or  rent 
for  the  landlord  or  proprietor  of  the  soil.  But  the  labor  of  artificers  does 
nothing  more  than  replace  the  stock  which  employs  them,  (or  which  fur- 
nishes materials,  tools,  and  wages,)  and  yield  the  ordinary  profit  upon  that 
stock.  It  yields  nothing  equivalent  to  the  rent  of  land;  neither  does  it  add 
any  thing  to  the  total  value  of  the  whole  annual  produce  of  the  land  and 
labor  of  the  country.  The  additional  value  given  to  those  parts  of  the  pro- 
duce of  land,  which  are  wrought  into  manufactures,  is  counterbalanced 
by  the  value  of  those  other  parts  of  that  produce  which  are  consumed  by 
the  manufacturers.  It  can,  therefore,  only  be  by  saving  or  parsimony, 
not  by  the  positive  productiveness  of  their  labor,  that  the  classes  of  artificers 
can,  in  any  degree,  augment  the  revenue  of  the  society. 

To  this  it  has  been  answered, 

1.  "  That  inasmuch  as  it  is  acknowledged,  that  manufacturing  labor  re-pro- 
duces a  value  equal  to  that  which  is  expended  or  consumed  in  carrying  it 
on,  and  continues  in  existence  the  original  stock  or  capital  employed;  it 
ought,  on  that  account,  alone,  to  escape  being  considered  as  wholly  unpro- 
ductive. That  though  it  should  be  admitted,  as  alleged,  that  the  consump- 
tion of  the  produce  of  the  soil,  by  the  classes  of  artificers  or  manufacturers, 
is  exactly  equal  to  the  value  added  by  their  labor  to  the  materials  upon 
which  it  is  exerted;  yet,  it  would  not  thence  follow,  that  it  added  nothing 
to  .the  revenue  of  the  society,  or  to  the  aggregate  value  of  the  annual  pro- 
duce of  its  land  and  labor.  If  the  consumption  for  any  given  period 
amounted  to  a  given  sum,  and  the  increased  value  of  the  produce  manu- 
factured, in  the  same  period,  to  a  like  sum;  the  total  amount  of  the  con- 
sumption and  production,  during  that  period,  would  be  equal  to  the  two 
sums,  and  consequently  double  the  value  of  the  agricultural  produce  con- 
sumed: and  though  the  increment  of  vaiue  produced  by  the.  classes  of  arti- 
ficers should,  at  no  time,  exceed  the  value  of  the  produce  of  the  land  con- 
sumed by  them,  yet  there  would  be  at  every  moment,  in  consequence  of 
their  labor,  a  greater  value  of  goods  in  the  market  than  would  exist  inde- 
pendent of  it." 

2.  "  That  the  position  that  artificers  can  augment  the  revenue  of  a  so- 
ciety only  by  parsimony,  is  true  in  no  other  sense  than  in  one  which  is 
equally  applicable  to  husbandmen  or  cultivators.  It  may  be  alike  affirmed 
of  all  these  classes,  that  the  fund  acquired  by  their  labor,  and  destined  for 
their  support,  is  not,  in  an  ordinary  way,  more  than  equal  to  it.  And  hence 


1791.]  SECRETARY  @F  THE  TREASURY.  81 

it  will  follow,  that  augmentations  of  the  wealth  or  capital  of  the  community, 
(except  in  the  instances  of  some  extraordinary  dexterity  or  skill,)  can  only 
proceed,  with  respect  to  any  of  them,  from  the  savings  of  the  more  thrifty 
and  parsimonious. 

3.  "  That  the  annual  produce  of  the  land  and  lahor  of  a  country  can 
only  be  increased  in  two  ways — by  some  improvement  in  the  productive 
powers  of  the  useful  labor  which  actually  exists  within  it,  or  by  some  increase 
in  the  quantity  of  such  labor:  That  with  regard  to  the  first,  the  labor  of  ar- 
tificers being  capable  of  greater  subdivision  and  simplicity  of  operation  than 
that  of  cultivators,  it  is  susceptible,  in  a  proportionally  greater  degree  of 
improvement  in  its  productive  powers,  whether  to  be  derived  from  an  ac- 
cession of  skill  or  from  the  application  of  ingenious  machinery:  in  which 
particular,  therefore,  the  labor  employed  in  the  culture  of  land  can  pretend 
to  no  advantage  over  that  engaged  in  manufactures:  That  with  regard  to  an 
augmentation  of  the  quantity  of  useful  labor,  this,  excluding  adventitious 
circumstances,  must  depend  essentially  upon  an  increase  of  capital,  which 
again  must  depend  upon  the  savings  made  out  of  the  revenues  of  those  who 
furnish  or  manage  that  which  is  at  any  time  employed,  whether  in  agricul- 
ture or  in  manufactures,  or  in  any  other  way." 

But  while  the  exclusive  productiveness  of  agricultural  labor  has  been 
thus  denied  and  refuted,  the  superiority  of  its  productiveness  has  been  con- 
ceded without  hesitation.  As  this  concession  involves  a  point  of  consider- 
able magnitude,  in  relation  to  maxims  of  public  administration,  the  grounds 
on  which  it  rests  are  worthy  of  a  distinct  and  particular  examination. 

One  of  the  arguments  made  use  of  in  support  of  the  idea,  may  be  pro- 
nounced both  quaint  and  superficial:  It  amounts  to  this- — That  in  the  prd- 
ductions  of  the  soil,  nature  co-operates  with  man;  and  that  the  effect  of 
their  joint  labor  must  be  greater  than  that  of  the  labor  of  man  alone. 

This,  however,  is' far  from  being  a  necessary  inference.  It  is  very  con- 
ceivable, that  the  labor  of  man  alone  laid  out  upon  a  work  requiring  great 
skill  and  art  to  bring  it  to  perfection,  may  be  more  productive,  in  value,  than 
the  labor  of  nature  and  man  combined,  when  directed  towards  more  simple 
operations  and  objects:  and  when  it  is  recollected  to  what  an  extent  the  agency 
of  nature,  in  the  application  of  the  mechanical  powers,  is  made  auxiliary 
to  the  prosecution  of  manufactures,  the  suggestion  which  haa  been  noticed 
loses  even  the  appearance  of  plausibility. 

It  might  also  be  observed,  with  a  contrary  view,  that  the  labor  employed 
in  agriculture,  is,  in  a  great  measure,  periodical  and  occasional,  depending  on 
seasons,  and  liable  to  various  and  long  intermissions;  while  that  occupied  in 
many  manufactures  is  constant  and  regular,  extending  through  the  year, 
embracing,  in  some  instances,  night  as  well  as  day.  It  is  also  proba- 
ble that  there  are  among  the  cultivators  of  land,  more  examples  of  remiss- 
ness than  among  artificers.  The  farmer,  from  the  peculiar  fertility  of  his 
land,  or  some  other  favorable  circumstance,  may  frequently  obtain  a  liveli- 
hood, even  with  a  considerable  degree  of  carelessness  in  the  mode  of  cul- 
tivation; but  the  artisan  can  with  difficulty  effect  the  same  object,  without 
exerting  himself  pretty  equally  with  all  those  who  are  engaged  in  the  same 
pursuit.  And  if  it  may  likewise  be  assumed  as  a  fact,  that  manufactures 
open  a  wider  field  to  exertions  of  ingenuity  than  agriculture,  it  would  not 
be  a  strained  conjecture,  that  the  labor  employed  in  the  former,  being  at 
once  more  constant,  more  uniform,  and  more  ingenious,  than  that  'which  is 
employed  in  the  latter,  will  be  found,  at  the  same  time,  more  productive. 


REPORTS  OF  THE 


[1791. 


But  it  is  not  meant  to  lay  stress  on  observations  of  this  nature;  they 
ought  only  to  serve  as  a  counterbalance  to  those  of  a  similar  complexion. 
Circumstances  so  vague  and  general,  as  well  as  so  abstract,  can  afford  little 
instruction  in  a  matter  of  this  kind. 

Another,  and  that  which  seems  to  be  the  principal  argument  offered  for 
the  superior  productiveness  of  agricultural  labor,  turns  upon  the  allegation, 
that  labor  employed  on  manufactures,  yields  nothing  equivalent  to  the  rent 
of  land;  or  to  that  nett  surplus,  as  it  is  called,  which  accrues  to  the  proprie- 
tor of  the  soil. 

But  this  distinction,  important  as  it  has  been  deemed,  appears  rather  ver- 
bal than  substantial. 

It  is  easily  discernible,  that  what  in  the  first  instance  is  divided  into  two 
parts,  under  the  denominations  of  the  ordinary  profit  of  the  stock  of  the 
"farmer  and  rent  to  the  landlord,  is,  in  the  second  instance,  united  under  the 
general  appellation  of  the  ordinary  profit  on  the  stock  of  the  undertaker; 
and  that  this  formal  or  verbal  distribution  constitutes  the  whole  difference 
In  the  two  cases.  It  seems  to  have  been  overlooked,  that  the  land  is  itself 
a  stock  or  capital,  advanced  or  lent  by  its  owner  to  the  occupier  or  tenant, 
and  that  the  rent  he  receives  is  only  the  ordinary  profit  of  a  certain  stock  in 
land,  not  managed  by  the  proprietor  himself,  but  by  another,  to  whom  he 
lends  or  lets  it,  and  who,  on  his  part,  advances  a  second  capital  to  stock  and 
improve  the  land,  upon  which  he  also  receives  the  usual  .profit.  The  rent  of 
the  landlord  and  the  profit  of  the  farmer  are,  therefore,  nothing  more  than 
the  ordinary  profits  of  two  capitals  belonging  to  two  different  persons,  and 
"united  in  the  cultivation  of  a  farm:  as,  in  the  other  case,  the  surplus  which 
arises  upon  any  manufactory,  after  replacing  the  expenses  of  carrying  it  on, 
answers  to  the  ordinary  profits  of  one  or  more  capitals  engaged  in  the  pro- 
secution of  such  manufactory.  It  is  said  one  or  more  capitals,  because,  in 
fact,  the  same  thing  which  is  contemplated  in  the  case  of  the  farm,  some- 
times happens  in  that  of  a  manufactory.  There  is  one  who  furnishes  a 
part  of  the  capital,  or  lends  a  part  of  the  money  by  which  it  is  carried  on, 
and  another  who  carries  it  on  with  the  addition  of  his  own  capital.  Out  of 
the  surplus  which  remains  after  defraying  expenses,  an  interest  is  paid  to 
the  money-lender,  for  the  portion  of  the  capital  furnished  by  him,  which 
exactly  agrees  with  the  rent  paid  to  the  landlord;  and  the  residue  of  that 
surplus  constitutes  the  profit  of  the  undertaker  or  manufacturer,  and  agrees 
with  what  is  denominated  the  ordinary  profits  on  the  stock  of  the  farmer. 
Both  together,  make  the  ordinary  profits  of  two  capitals  employed  in  a 
manufactory;  as,  in  the  other  case,  the  rent  of  the  landlord  and  the  revenue 
oi  the  farmer  compose  the  ordinary  profits  of  two  capitals  employed  in  the 
cultivation  of  a  farm. 

The  rent,  therefore,  accruing  to  the  proprietor  of  the  land,  far  from  being 
a  criterion  of  exclusive  productiveness,  as  has  been  argued,  is  no  criterion 
even  of  superior  productiveness.  The  question  must  still  be,  whether  the 
surplus,  after  defraying  expenses  of  a  given  capital,  employed  in  the  pur- 
chase and  improvement  of  a  piece  of  land,  is  greater  or  less  than  that  of  a 
like  capital,  employed  in  the  prosecution  of  a  manufactory;  or  whether  the 
whole  value  produced  from  a  given  capital  and  a  given  quantity  of  labor  em- 
ployed in  one  way,  be  greater  or  less  than  the  whole  value  produced  from 
an  equal  capital  and  an  equal  quantity  of  labor  employed  in  the  other  way; 
or  rather,  perhaps,  whether  the  business  of  agriculture  or  that  of  manufac- 
tures will  yield  the  greatest  product,  according  to  a  compound  ratio  of  the 


I791.J  SECRETARY  OF  THE  TREASURY.  ^ 

quantity  of  the  capital,  and  the  quantity  of  labor,  which  are  employed  in  the 
one  or  in  the  other. 

The  solution  of  either  of  these  questions  is  not  easy;  it  involves  numerous 
and  complicated  details,  depending  on  an  accurate  knowledge  of  the  objects 
to  be  compared.  It  is  not  known  that  the  comparison  has  ever  yet  been 
made  upon  sufficient  data,  properly  ascertained  and  analyzed.  To  be  able  to 
make  it  on  the  present  occasion,  with  satisfactory  precision,  would  demand 
more  previous  inquiry  and  investigation,  than  there  has  been  hitherto  either 
leisure  or  opportunity  to  accomplish. 

Some  essays,  however,  have  been  made  towards  acquiring  the  requisite 
information;  which  have  rather  served  to  throw  doubt  upon,  than  to  confirm 
the  hypothesis  under  examination.  But  it  ought  to  be  acknowledged,  that 
they  have  been  too  little  diversified,  and  are  too  imperfect  to  authorize  a  de- 
finitive conclusion  either  way;  leading  rather  to  probable  conjecture  than  to 
certain  deduction.  They  render  it  probable,  that  there  are  various  branches 
of  manufactures,  in  which  a  given  capital  will  yield  a  greater  total  product, 
and  a  considerably  greater  nett  product,  than  an  equal  capital  invested  in  the 
purchase  and  improvement  of  lands;  and  that  there  are  also  some  branches, 
in  which  both  the  gross  and  the  nett  produce  will  exceed  that  of  agricultural 
industry,  according  to  a  compound  ratio  of  capital  and  labor.  But  it  is  on 
this  last  point  that  there  appears  to  be  the  greatest  room  for  doubt.  It  is  far 
less  difficult  to  infer  generally,  that  the  nett  produce  of  capital  engaged  in 
manufacturing  enterprises  is  greater  than  that  of  capital  engaged  in  agricul- 
ture. 

The  foregoing  suggestions  are  not  designed  to  inculcate  an  opinion  that 
manufacturing  industry  is  more  productive  than  that  of  agriculture.  They 
are  intended  rather  to  show  that  the  reverse  of  this  proposition  is  not  ascertain- 
ed; that  the  general  arguments,  which  are  brought  to  establish  it,  are  not  satis- 
factory; and  consequently,  that  a  supposition  of  the,  superior  productiveness 
of  tillage  ought  to  be  no  obstacle  to  listening  to  any  substantial  inducements  to 
the  encouragement  of  manufactures,  which  may  be  otherwise  perceived  to 
exist,  through  an  apprehension  that  they  may  have  a  tendency  to  divert  la- 
bor from  a  more  to  a  less  profitable  employment. 

It  is  extremely  probable,  that  on  a  full  and  accurate  development  of  the 
matter,  on  the  ground  of  fact  and  calculation,  it  would  be  discovered  that 
there  is  no  material  difference  between  the  aggregate  productiveness  of  the 
one,  and  of  the  other  kind  of  industry;  and  that  the  propriety  of  the  encour- 
agements, which  may,  in  any  case,  be  proposed  to  be  given  to  either,  ought 
to  be  determined  upon  considerations  irrelative  to  any  comparison  of  that 
nature. 

II.  But  without  contending  for  the  superior  productiveness  of  manufaetur 
ing  industry,  it  may  conduce  to  a  better  judgment  of  the  policy  which 
ought  to  be  pursued  respecting  its  encouragement,  to  contemplate  the  sub- 
ject under  some  additional  aspects,  tending  not  only  to  confirm  the  idea  that 
this  kind  of  industry  has  been  improperly  represented  as  unproductive  in 
itself,  but  to  evince,  in  addition,  that  the  establishment  and  diffusion  of  man 
ufactures  have  the  effect  of  rendering  the  total  mass  of  useful  and  productive 
labor,  in  a  community,  greater  than  it  would  otherwise  be.  In  prosecuting 
this  discussion,  it  may  be  necessary,  briefly  to  resume  and  review  some  of 
the  topics  which  have  been  already  touched. 

To  affirm  that  the  labor  of  the  manufacturer  is  unproductive,  because  he 
c&nsumes-as  much  of  the  produce  of  land   as  he  odds  value  to  the.  raw  my- 


84  REPORTS  OF  THE  [1792* 

terial  which  he  manufactures,  is  not  better  founded,  than  it  would  be  to  af- 
firm that  the  labor  of  the  farmer,  which  furnishes  materials  to  the  manufac- 
turer, is  unproductive,  because  he  consumes  an  equal  value  of  manufactured 
articles.  Each  furnishes  a  certain  portion  of  the  produce  of  his  labor  to  the 
other,  and  each  destroys  a  correspondent  portion  of  the  produce  of  the  labor 
of  the  other.  In  the  mean  time,  the  maintenance  of  two  citizens,  instead  of 
one,  is  going  on;  the  State  has  two  members  instead  of  one;  and  they,  together., 
consume  twice  the  value  of  what  is  produced  from  the  land. 

If,  instead  of  a  farmer  and  artificer,  there  were  a  farmer  only,  he  would  be 
under  the  necessity  of  devoting  a  part  of  his  labor  to  the  fabrication  of  clothing, 
and  other  articles,  which  he  would  procure  of  the  artificer,  in  the  case  of 
there  being  such  a  person ;  and  of  course  he  would  be  able  to  devote  less  la- 
bor to  the  cultivation  of  his  farm,  and  would  draw  from  it  a  proportionably 
less  product.  The  whole  quantity  of  production  in  this  state  of  things,  in 
provisions,  raw  materials  and  manufactures,  would  certainly  not  exceed  in 
value  the  amount  of  what  would  be  produced  in  provisions  and  raw  mate- 
rials only,  if  there  were  an  artificer  as  well  as  a  farmer. 

Again—If  there  were  both  an  artificer  and  a  farmer,  the  latter  would  be 
left  at  liberty  to  pursue  exclusively  the  cultivation  of  his  farm.  A  greater 
quantity  of  provisions  and  raw  materials  would,  of  course,  be  produced, 
equal,  at  least,  as  has  been  already  observed,  to  the  whole  amount  of  the  pro- 
visions, raw  materials,  and  manufactures,  which  would  exist  on  a  contrary 
supposition.  The  artificer,  at  the  same  time,  would  be  going  on  in  the 
production  of  manufactured  commodities,  to  an  amount  sufficient,  not  only 
to  repay  the  farmer,  in  those  commodities,  for  the  provisions  and  materials 
which  were  procured  from  him,  but  to  furnish  the  artificer  himself  with  a 
supply  of  similar  commodities  for  his  own  use.  Thus,  then,  there  would  be 
two  quantities  or  values  in  existence,  instead  of  one;  and  the  revenue  and  con- 
sumption would  be  double  in  one  case  what  it  would  be  in  the  other. 

If,  in  place  of  both  these  suppositions,  there  were  supposed  to  be  two 
farmers  and  no  artificer,  each  of  whom  applied  a  part  of  his  labor  to  the  cul- 
ture of  land,  and  another  part  to  the  fabrication  of  manufactures;  in  this 
case,  the  portion  of  the  labor  of  both  bestowed  upon  land  would  produce  the 
same  quantity  of  provisions  and  raw  materials  only,  as  would  be  produced 
by  the  entire  sum  of  the  labor  of  one  applied  in  the  same  manner;  and  the 
portion  of  the  labor  of  both  bestowed  upon  manufactures,  would  produce 
the  same  quantity  of  manufactures  only,  as  would  be  produced  by  the  en- 
tire sum  of  the  labor  of  one  applied  in  the  same  manner.  Hence,  the  pro- 
duce of  the  labor  of  the  two  farmers  would  not  be  greater  than  the  produce 
of  the  labor  of  the  farmer  and  artificer;  and  hence  it  results,  that  the  labor 
of  the  artificer  is  as  positively  productive  as  that  of  the  farmer,  and  as  posi- 
tively augments  the  revenue  of  the  society. 

The  labor  of  the  artificer  replaces  to  the  farmer  that  portion  of  his  labor 
with  which  he  provides  the  materials  of  exchange  with  the  artificer,  and 
which  he  would  otherwise  have  been  compelled  to  apply  to  manufactures; 
and  while  the  artificer  thus  enables  the  farmer  to  enlarge  his  stock  of  agri- 
cultural industry,  a  portion  of  which  he  purchases  for  his  own  use,  he  also 
supplies  himself  with  the  manufactured  articles  of  which  he  stands  in  need. 
He  does  still  more.  Besides  this  equivalent,  which  he  gives  for  the  portion 
of  agricultural  labor  consumed  by  him,  and  this  supply  of  manufactured 
commodities  for  his  own  consumption,  he  furnishes  still  a  surplus,  which 
compensates  for  the  use  of  the  capital  advanced,  either  by  himself  or  som^ 


■1791.]  SECRETARY  OF  THE  TREASURY.  S5 

•other  person,  for  carrying  on  the  business.  This  is  the  ordinary  profit  of 
the  stock  employed  in  the  manufactory,  and  is,  in  every  sense,  as  effective 
an  addition  to  the  income  of  the  society  as  the  rent  of  land. 

The  produce  of  the  labor  of  the  artificer,  consequently,  may  be  regarded 
as  composed  of  thi'ee  parts;  one,  by  which  the  provisions  for  his  subsistence 
and  the  materials  for  his  work  are  purchased  of  the  farmer;  one,  by  which 
he  supplies  himself  with  manufactured  necessaries;  and  a  third,  which  con- 
stitutes the  profit  on  the  stock  employed.  The  two  last  portions  seem  to 
have  been  overlooked  in  the  system  which  represents  manufacturing  indus- 
try as  barren  and  unproductive. 

In  the  course  of  the  preceding  illustrations,  the  products  of  equal  quanti- 
ties of  the  labor  of  the  farmer  and  artificer,  have  been  treated  as  if  equal  to 
each  other.  But  this  is  not  to  be  understood  as  intending  to  assert  any  such 
precise  equality.  It  is  merely  a  manner  of  expression,  adopted  for  the  sake 
of  simplicity  and  perspicuity.  Whether  the  value  of  the  produce  of  the 
labor  of  the  farmer  be  somewhat  more  or  less  than  that  of  the  artificer,  is  not 
material  to  the  main  scope  of  the  argument,  which  hitherto  has  only  aimed, 
at  showing,  that  the  one,  as  well  as  the  other,  occasions  a  positive  augmenta- 
tion of  the  total  produce  and  revenue  of  the  society. 

It  is  now  proper  to  proceed  a  step  further,  and  to  enumerate  the  , principal 
circumstances,  from  which  it  may  be  inferred,  that  manufacturing  establish- 
ments not  only  occasion  a  positive  augmentation  of  the  produce  and  revenue 
of  the  society,  but  that  they  contribute  essentially  to  rendering  them  greater 
than  they  could  possibly  be  without  such  establishments.  These  circum- 
stances are, 

1.  The  division  of  labor. 

2.  An  extension  of  the  use  of  machinery. 

3.  Additional  employment  to  classes  of  the  community  not  ordinarily  en- 
gaged in  the  business. 

4.  The  promoting  of  emigration  from  foreign  countries. 

5.  The  furnishing  greater  scope  for  the  diversity  of  talents  and  disposi- 
tions, which  discriminate  men  from  each  other. 

6.  The  affording  a  more  ample  and  various  field  for  enterprise. 

7.  The  creating,  in  some  instances,  a  new,  and  securing,  in  all,  a  more 
certain  and  steady  demand  for  the  surplus  produce  of  the  soil. 

Each  of  these  circumstances  has  a  considerable  influence  upon  the  total 
mass  of  industrious  effort  in  a  community;  together,  they  add  to  it  a  degree 
of  energy  and  effect,  which  are  not  easily  conceived.  Some  comments  upon 
each  of  them,  in  the  order  in  which  they  have  been  stated,  may  serve  to 
explain  their  importance. 

/.  */2s  to  the  division  of  labor. 

It  has  justly  been  observed,  that  there  is  scarcely  any  thing  of  greater 
moment  in  the  economy  of  a  nation,  than  the  proper  division  of  labor.  The 
separation  of  occupations  causes  each  to  be  carried  to  a  much  greater  per- 
fection than  it  could  possibly  acquire  if  they  were  blended.  This  arises 
principally  from  three  circumstances: 

1st.  The  greater  skill  and  dexterity  naturally  resulting  from  a  constant 
and  undivided  application  to  a  single  object.  It  is  evident  that  these  pro- 
perties must  increase  in  proportion  to  the  separation  and  simplification  of 
objects,  and  the  steadiness  of  the  attention  devoted  to  each;  and  must  be  less 
in  proportion  to  the  complication  of  objects,  and  the  number  among  which 
the  attention  is  distracted. 


Sb  REPORTS  OF  THE  [1791. 

2d.  The  economy  of  time,  by  avoiding  the  loss  of  it,  incident  to  a  fre- 
quent transition  from  one  operation  to  another  of  a  different  nature.  This 
depends  on  various  circumstances;  the  transition  itself,  the  orderly  disposi- 
tion of  the  implements,  machines,  and  materials  employed  in  the  operation 
to  be  relinquished,  the  preparatory  steps  to  the  commencement  of  a  new 
one,  the  interruption  of  the  impulse,  which  the  mind  of  the  workman  ac- 
quires, from  being  engaged  in  a  particular  operation;  the  distractions,  hesi- 
tations, and  reluctances,  which  attend  the  passage  from  one  kind  of  business 
to  another. 

3d.  An  extension  of  the  use  of  machinery.  A  man  occupied  on  a  single 
object  will  have  it  more  in  his  power,  and  will  be  more  naturally  led  to 
exert  his  imagination  in  devising  methods  to  facilitate  and  abridge  labor, 
than  if  he  were  perplexed  by  a  variety  of  independent  and  dissimilar  ope- 
rations. Besides  this,  the  fabrication  of  machines,  in  numerous  instances, 
becoming  itself  a  distinct  trade,  the  artist  who  follows  it  has  all  the  advan- 
tages which  have  been  enumerated,  for  improvement  in  his  particular  art; 
and,  in  both  ways,  the  invention  and  application  of  machinery  are  extended. 

And  from  these  causes  united,  the  mere  separation  of  the  occupation  of 
the  cultivator  from  that  of  the  artificer,  has  the  effect  of  augmenting  the 
productive  powers  of  labor,  and  with  them,  the  total  mass  of  the  produce 
or  revenue  of  a  country.  In  this  single  view  of  the  subject,  therefore,  the 
utility  of  artificers  or  manufacturers,  towards  promoting  an  increase  of  pro- 
ductive industry,  is  apparent. 

II.  As  to  an  extension  of  the  use  of  machinery ,  a  point  which,  though 
-partly  anticipated,  requires  to  be  placed  in  one  or  two  additional  lights. 

The  employment  of  machinery  forms  an  item  of  great  importance  in  the 
general  mass  of  national  industry.  It  is  an  artificial  force  brought  in  aid  of 
the  natural  force  of  man;  and,  to  all  the  purposes  of  labor,  is  an  increase  of 
hands,  an  accession  of  strength,  unencumbered  too  by  the  expense  of  main- 
taining the  laborer.  May  it  not,  therefore,  be  fairly  inferred,  that  those  oc- 
cupations which  give  greatest  scope  to  the  use  of  this  auxiliary,  contri- 
bute most  to  the  general  stock  of  industrious  effort,  and,  in  consequence,  to 
the  general  product  of  industry? 

It  shall  be  taken  for  granted,  and  the  truth  of  the  position  referred  to 
observation,  that  manufacturing  pursuits  are  susceptible,  in  a  greater  de- 
gree, of  the  application  of  machinery,  than  those  of  agriculture.  If  so,  all 
the  difference  is  lost  to  a  community,  which,  instead  of  manufacturing  for 
itself,  procures  the  fabrics  requisite  to  it's  supply  from  other  countries.  The 
substitution  of  foreign  for  domestic  manufactures,  is  a  transfer  to  foreign  na- 
tions of  the  advantages  accruing  from  the  employment  of  machinery,  in  the 
modes  in  which  it  is  capable  of  being  employed,  with  most  utility  and  to 
the  greatest  extent. 

The  cotton-mill,  invented  in  England  within  the  last  twenty  years,  is  a 
signal  illustration  of  the  general  proposition  which  has  been  just  advanced.- 
In  consequence  of  it,  all  the  different  processes  for  spinning  cotton  are  per- 
formed by  means  of  machines,  which  are  put  in  motion  by  water,  and  at- 
tended chiefly  by  women  and  children;  and  by  a  smaller  number  of  persons, 
in  the  whole,  than  are  requisite  in  the  ordinary  mode  of  spinning.  And  it 
is  an  advantage  of  great  moment,  that  the  operations  of  this  mill  continue 
with  convenience,  during  the  night '  as  well  as  through  the  day.  The  pro- 
digious effect  of  such  a  machine  is  easily  conceived.  To  this  invention  is 
to  be  attributed,  essentially,  the  immense  progress  which  has  been  so  suddenlv 
made  in  Groat  Britain  in  the  various  fabrics  of  cotton. 


1791.]  SECRETARY  OF  THE  TREASURY.  $7 

III.  JLs  to  the  additional  employment  of  classes  of  the  community 
■not  originally  engaged  in  the  particular  business. 

This  is  not  among  the  least  valuable  of  the  means  by  which  manufactur- 
xng  institutions  contribute  to  augment  the  general  stock  of  industry  and 
production.  In  places  where  those  institutions  prevail,  besides  the  persons 
regularly  engaged  in  them,  they  afford  occasional  and  extra  employment  to 
industrious  individuals  and  families,  who  are  willing  to  devote  the  leisure 
resulting  from  the  intermissions  of  their  ordinary  pursuits  to  collateral  labors, 
as  a  resource  for  multiplying  their  acquisitions  or  their  enjoyments.  The  hus- 
bandman himself  experiences  a  new  source  of  prorit  and  support  from  the 
increased  industry  of  his  wife  and  daughters,  invited  and  stimulated  by  the 
demands  of  .the  neighboring  manufactories. 

Beside  this  advantage  of  occasional  employment  to  classes  having  differ- 
ent occupations,  there  is  another,  of  a  nature  allied  to  it,  and  of  a  similar 
tendency.  This  is  the  employment  of  persons  who  would  otherwise  be 
idle,  and  in  many  cases  a  burthen  on  the  community,  either  from  the  bias  of 
temper,  habit,  infirmity  of  body,  or  some  other  cause,  indisposing  or  dis- 
qualifying them  for  the  toils  of  the  country.  It  is  worthy  of  particular  re= 
mark,  that,  in  general,  women  and  children  are  rendered  more  useful, 
and  the  latter  more  early  useful,  by  manufacturing  establishments,  than  they 
would  otherwise  be.  Of  the  number  of  persons  employed  in  the  cotton 
manufactories  of  Great  Britain,  it  is  computed  that  four-sevenths,  nearly, 
are  women  and  children;  of  whom  the  greatest  proportion  are  children,, 
and  many  of  them  of  a  tender  age. 

And  thus  it  appears  to  be  one  of  the  attributes  of  manufactures,  and  one 
of  no  small  consequence,  to  give  occasion  to  the  exertion  of  a  greater  quan- 
tity of  industry,  even  by  the  same  number  of  persons,  where  they  happen 
to  prevail,  than  would  exist  if  there  were  no  such  establishments. 

IV.  Jis  to  the  promoting  of  emigration  from  foreign  countries. 
Men  reluctantly  quit  one  course  of  occupation  and  livelihood  for  another^ 

unless  invited  to  it  by  very  apparent  and  proximate  advantages.  Many  who 
would  go  from  one  country  to  another,  if  they  had  a  prospect  of  continuing 
with  more  benefit  the  callings  to  which  they  have  been  educated,  will  often 
not  be  tempted  to  change  their  situation  by  the  hope  of  doing  better  in  some 
other  way.  Manufacturers  who,  listening  to  the  powerful  invitations  of  a 
better  price  for  their  fabrics,  or  their  labor,  of  greater  cheapness  of  provisions 
and  raw  materials,  of  an  exemption  from  the  chief  part  of  the  taxes,  bur- 
thens and  restraints,  which  they  endure  in  the  old  world,  of  greater  personal 
independence  and  consequence,  under  the  operation  of  a  more  equal  govern- 
ment, and  of  what  is  far  more  precious  than  mere  religious  toleration,  a  per- 
fect equality  of  religious  privileges;  would  probably  flock  from  Europe  to 
the  United  States,  to  pursue  their  own  trades  or  professions,  if  they  were 
once  made  sensible  of  the  advantages  they  would  enjoy,  and  were  inspired 
with  an  assurance  of  encouragement  and  employment,  will,  with  difficulty, 
be  induced  to  transplant  themselves,  with  a  view  to  becoming  cultivators 
of  land. 

If  it  be  true,  then,  that  it  is  the  interest  of  the  United  States  to  open  every 
possible  avenue  to  emigration  from  abroad,  it  affords  a  weighty  argument  for 
the  encouragement  of  manufactures;  which,  for  the  reasons  just  assigned;, 
will  have  the  strongest  tendency  to  multiply  the  inducements  to  it. 

Here  is  perceived  an  important  resource,  not  only  for  extending  the 
population,  and  with  it  the  useful  and  productive  labor  of  the.  country,  but 


$&  REPORT*  OF  THE  j  1791, 

likewise  for  the  prosecution  of  manufactures,  without  deducting  from  the 
number  of  hands,  which  might  otherwise  be  drawn  to  tillage;  and  even  for 
the  indemnification  of  agriculture,  for  such  as  might  happen  to  be  diverted 
from  it.  Many,  whom  manufacturing  views  would  induce  to  emigrate, 
would  afterwards  yield  to  the  temptations  which  the  'particular  situation  of 
this  country  holds  out  to  agricultural  pursuits.  And  while  agriculture  would, 
in  other  respects,  derive  many  signal  and  unmingled  advantages  from  the 
growth  of  manufactures,  it  is  a  problem  whether  it  would  gain  or  lose,  as 
to  the  article  of  the  number  of  persons  employed  in  carrying  it  on. 

.  V.  As  to  the  furnishing  greater  scope  Jor  the  diversity  of  talents  and 
dispositions,  which  discriminate  men  from  each  other. 

This  is  a  much  more  powerful  mean  of  augmenting  the  fund  of  national 
industry  than  may  at  first  sight  appear..  Jt  is  a  just  observation,  that  minds  of* 
the  strongest^md  most  active  powers  for  their  proper  objects,  fall  below  medio- 
crity, and  labor  without  effect,  if  confined  to  uncongenial  pursuits.  And  it 
is  thence  to  be  inferred,  that  the  results  of  human  exertion  may  be  im- 
mensely increased  by  diversifying  its.  objects.  When  all  the  different  kinds 
of  industry  obtain  in  a  community,  each  individual  can  find  his  proper 
element,  and  can  call  into  activity  the  whole  vigor  of  his  nature.  And  the 
community  is  benefited  by  the  services  of  its  respective  members,  in  the 
manner  in  which  each  can  serve  it  with  most  effect. 

If  there  be  any  thing  in  a  remark  often  to  be  met  with,  namely,  that 
there  is,  in  the  genius  of  the  people  of  this  country,  a  peculiar  aptitude  for 
mechanic  improvements,  it  would  operate  as  a  forcible  reason  for  giving 
opportunities  to  the  exercise  of  that  species  of  talent,  by  the  propagation  of 
manufactures. 

VI.  As  to  the  affording  a  more  ample  and  various  field  for  enterprise. 

This  also  is  of  greater  consequence  in  the  general  scale  of  national  exer- 
tion, than  might  perhaps  on  a  superficial  view  be  supposed,  and  has  .effects 
not  altogether  dissimilar  from  those  of  the  circumstance  last  noticed.  To 
cherish  and  stimulate  the  activity  of  the  human  mind,  by  multiplying  the 
objects  of  enterprise,  is  not  among  the  least  considerable  of  the  expedients 
by  which  the  wealth  of  a  nation  may  be  promoted.  Even  things  ill  them- 
selves not  positively  advantageous,  sometimes  become  so,  by  their  tendency 
to  provoke  exertion.  Every  new  scene  which  is  opened  to  the  busy  nature 
of  man  to  rouse  and  exert  itself,  is  the  addition  of  a  new  energy  to  the  gen- 
eral stock  of  effort. 

The  spirit  of  enterprise,  useful  and  prolific  as  it  is,  must  necessarily  be 
contracted  or  expanded,  in  proportion  to  the  simplicity  or  variety  of  the 
occupations  and  productions  which  are  to  be  found  in  a  society.  It  must 
be  less  in  a  nation  of  mere  cultivators,  than  in  a  nation  of  cultivators  and 
merchants;  less  in  a  nation  of  cultivators  and  merchants,  than  in  a  nation 
of  cultivators,  artificers  and  merchants. 

VII.  As  to  the  creating,  in  some  instances,  a  new,  and  securing  in  ally 
a  more  certain  and  steady  demand,  for  the  surplus  produce  of  the  soil. 

This  is  among  the  most  important  of  the  circumstances  which  have  been 
indicated.  It  is  a  principal  mean  by  which  the  establishment  of  manufac- 
tures contributes  to  an  augmentation  of  the  produce  or  revenue  of  a  country, 
and  has  an  immediate  and  direct  relation  to  the  prosperity  of  agriculture. 

It  is  evident  that  the  exertions  of  the  husbandman  will  be  steady  or  fluc- 
tuating, vigorous  or  feeble,  in  proportion  to  the  steadiness  or  fluctuation,  ad- 
equateness  or  inadequateness  of  the  markets  on  which  he  must  depend,  for 


1791.]  SECRETARY  OF  THE  TREASURY.  39 

the  vent  of  the  surplus  which  may  be  produced  by  his  labor;  and  that  such 
surplus,  in  the  ordinary  course  of  things,  will  be  greater  or  less  in  the  same 
proportion. 

For  the  purpose  of  this  vent,  a  domestic  market  is  greatly  to  be  preferred 
to  a  foreign  one;  because  it  is,  in  the  nature  of  things,  far  more  to  be  relied 
upon. 

It  is  a  primary  object  of  the  policy  of  nations,  to  be  able  to  supply  them- 
selves with  subsistence  from  their  own  soils;  and  manufacturing  nations,  as 
far  as  circumstances  permit,  endeavor  to  procure  from  the  same  source, 
the  raw  materials  necessary  for  their  own  fabrics.  This  disposition,  urged 
by  the  spirit  of  monopoly,  is  sometimes  even  carried  to  an  injudicious  ex- 
treme.  It  seems  not  always  to  be  recollected,  that  nations,  who  have  neither 
mines  nor  manufactures,  can  only  obtain  the  manufactured  articles  of  which 
they  stand  in  need,  by  an  exchange  of  the  products  of  their  soils;  and  that, 
if  those  who  can  best  furnish  them  with  such  articles,  are  unwilling  to  give 
a  due  course  to  this  exchange,  they  must,  of  necessity,  make  every  possible- 
effort  to  manufacture  for  themselves;  the  effect  of  which  is,  that  the  manu- 
facturing nations  abridge  the  natural  advantages  of  their  situation,  through 
an  unwillingness  to  permit  the  agricultural  countries  to  enjoy  the  advantages 
of  theirs,  and  sacrifice  the  interests  of  a  mutually  beneficial  intercourse  to  the 
vain  project  of  selling  every  thing  and  buying  nothing. 

But  it  is  also  a  consequence  of  the  policy  which  has  been  noted,  that  the 
foreign  demands  for  the  products  of  agricultural  countries,  is,  in  a  great  degree., 
rather  casual  and  occasional,  than  certain  or  constant.  To  what  extent  inju- 
rious interruptions  of  the  demand  for  some  of  the  staple  commodities  of  the 
United  States,  may  have  been  experienced  from  that  cause,  must  be  referred 
to  the  judgment  of  those  who  are  engaged  in  carrying  on  the  commerce  of 
the  country;  but  it  may  be  safely  affirmed,  that  such  interruptions  are,  at 
times,  very  inconveniently  felt,  and  that  cases  not  unfrequently  occur, 
in  which  markets  are  so  confined  and  restricted,  as  to  render  the  demand 
very  unequal  to  the  supply. 

Independently,  likewise,  of  the  artificial  impediments  which  are  created 
by  the  policy  in  question,  there  are  natural  causes  tending  to  render  the  ex- 
ternal demand  for  the  surplus  of  agricultural  nations  a  precarious  reliance. 
The  differences  of  seasons  in  the  countries  which  are  the  consumers,  make, 
immense  differences  in  the  produce  of  their  own  soils,  in  different  years;  and 
consequently  in  the  degrees  of  their  necessity  for  foreign  supply.  Plentiful 
harvests  with  them,  especially  if  similar  ones  occur  at  the  same  time  in  the 
countries  which  are  the  furnishers,  occasion,  of  course,  a  glut  in  the  markets 
of  the  latter. 

Considering  how  fast,  and  how  much  the  progress  of  new  settlements 
in  the  United  States,  must  increase  the  surplus  produce  of  the  soil,  and  weigh- 
ing seriously  the  tendency  of  the  system  which  prevails  among  most  of  the 
commercial  nations  of  Europe;  whatever  dependance  may  be  placed  on  the 
force  of  natural  circumstances  to  counteract  the  effects  of  an  artificial  policy, 
there  appear  strong  reasons  to  regard  the  foreign  demand  for  that  surplus,  as 
too  uncertain  a  reliance,  and  to  desire  a  substitute  for  it,  in  an  extensive  do- 
mestic market. 

To  secure  such  a  market  there  is  no  other  expedient  than  to  promote 
manufacturing  establishments.  Manufacturers,  who  constitute  the  most 
numerous  class,  after  the  cultivators  of  land,  arc  for  that  reason  the  princi- 
pal consumers  of  the  surplus  of  their  labor. 

This  idea  of  an  extensive  domestic  market  for  the  surplus  produce  of  the 


90  REPORTS  OF  THE  [1791. 

soil,  is  of  the  first  consequence.  It  is,  of  all  things,  that  which  most  effectu- 
ally conduces  to  a  flourishing  state  of  agriculture.  If  the  effect  of  manufac- 
tories should  be  to  detach  a  portion  of  the  hands  which  would  otherwise  be 
engaged  in  tillage,  it  might  possibly  cause  a  smaller  ^quantity  of  lands  to  be 
under  cultivation;  but  by  their  tendency  to  procure  a  more  certain  demand 
for  the  surplus  produce  of  the  soil,  they  would,  at  the  same  time,  cause  the 
lands  which  were  in  cultivation  to  be  better  improved  and  more  productive. 
And  while,  by  their  influence  the  condition  of  each  individual  farmer  would 
be  meliorated,  the  total  mass  of  agricultural  production  would  probably  be 
increased.  For  this  must  evidently  depend  as  much  upon  the  degree  of  im- 
provement, if  not  more,  than  upon  the  number  of  acres  under  culture. 

It  merits  particular  observation,  that  the  multiplication  of  manufactories  not 
only  furnishes  a  market  for  those  articles  which  have  been  accustomed  to  be 
produced  in^abundance  in  a  country;  but  it  likewise  creates  a  demand  for 
such  as  were  either  unknown,  or  produced  in  inconsiderable  quantities.  The 
bowels,  as  well  as  the  surface  of  the  earth,  are  ransacked  for  articles  which 
were  before  neglected.  Animals,  plants,  and  minerals,  acquire  an  utility  and 
value  which  were  before  unexplored. 

The  foregoing  considerations  seem  sufficient  to  establish,  as  general  pro- 
positions, that  it  is  the  interest  of  nations  to  diversify  the  industrious  pur- 
suits of  the  individuals  who  compose  them.  That  the  establishment  of  man- 
ufactures is  calculated  not  only  to  increase  the  general  stock  of  useful  and 
productive  labor,  but  even  to  improve  the  state  of  agriculture  in  particular; 
certainly  to  advance  the  interests  of  those  who  are  engaged  in  it.  There  are 
other  views  that  will  be  hereafter  taken  of  the  subject,  which  it  is  conceived 
will  serve  to  confirm  these  inferences. 

III.  Previously  to  a  further  discussion  of  the  objections  to  the  encourage- 
ment of  manufactures,  which  have  been  stated,  it  will  be  of  use  to  see  what 
can  be  said  in  reference  to  the  particular  situation  of  the  United  States, 
against  the  conclusions  appearing  to  result  from  what  has  been  already  offered. 

It  may  be  observed,  and  the  idea  is  of  no  inconsiderable  weight,  that  how- 
ever true  it  might  be,  that  a  State  which,  possessing  large  tracts  of  vacant 
and  fertile  territory,  was,  at  the  same  time,  secluded  from  foreign  commerce, 
would  find  its  interest  and  the  interest  of  agriculture,  in  diverting  a  part  of 
its  population  from  tillage  to  manufactures;  yet  it  will  not  follow,  that  the 
same  is  true  of  a  State  which,  having  such  vacant  and  fertile  territory,  has, 
at  the  same  time,  ample  opportunity  of  procuring  from  abroad,  on  good  terms, 
all  the  fabrics  of  .which  it  stands  in  need,  for  the  supply  of  its  inhabitants. 
The  power  of  doing  this,  at  least,  secures  the  great  advantage  of  a  division  of 
labor,  leaving  the  farmer  free  to  pursue,  exclusively,  the  culture  of  his  land, 
and  enabling  him  to  procure  with  its  products  the  manufactured  supplies  re- 
quisite either  to  his  wants  or  to  his  enjoyments.  And  though  it  should  be 
true,  that  in  settled  countries,  the  diversification  of  industry  is  conducive  to 
an  increase  in  the  productive  powers  of  labor,  and  to  an  augmentation  of  re- 
venue and  capital;  yet  it  is  scarcely  conceivable  that  there  can  be  any  thing 
of  so  solid  and  permanent  advantage  to  an  uncultivated  and  unpeopled  coun- 
try, as  to  convert  its  wastes  into  cultivated  and  inhabited  districts.  If  the 
revenue,  in  the  mean  time,  -should  be  less,  the  capital,  in  the  event,  must  be 
greater. 

To  these  observations,  the  following  appears  to  be- a  satisfactory  answer — 

1st.  If  the  system  of  perfect  liberty  to  industry  and  commerce,  were  the 
prevailing  system  of  nations,  the  arguments  which  dissuade  a  country  in  the 


1791.]  SECRETARY  GF  THE  TREASURY.  91 

jpredicament  of  the  United  States,  from  the  zealous  pursuit  of  manufactures* 
would  doubtless  have  great  force.  It  will  not  be  affirmed  that  they  might 
not  be  permitted,  with  few  exceptions  to  serve  as  a  rule  of  national  conducti 
In  such  a  state  of  things,  each  country  would  have  the  full  benefit  of  its  pe- 
euliar  advantages  to  compensate  for  its  deficiencies  or  disadvantages.  If  one 
nation  were  in  a  condition  to  supply  manufactured  articled,  on  better  terms 
than  another,  that  other  might  find  an  abundant  indemnification  in  a  supe- 
rior capacity  to  furnish  the  produce  of  the  soil.  And  a  free  exchange,  mutu- 
ally beneficial,  of  the  commodities  which  each  was  able  to  supply,  on  the 
best  terms,  might  be  carried  on  between  them,  supporting,  in  full  vigor,  the 
industry  of  each.  And  though  the  circumstances,  which  have  been  men- 
tioned, and  others  which  will  be  unfolded  hereafter,  render  it  probable,  that 
nations,  merely  agricultural,  would  not  enjoy  the  same  degree  of  opulence* 
in  proportion  to  their  numbers,  as  those  which  united  manufactures  with  ag- 
riculture; yet  the  progressive  improvement  of  the  lands  of  the  former  might, 
in  the  end,  atone  for  an  inferior  degree  of  opulence  in  the  mean  time;  and  in 
a  case  in  which  opposite  considerations  are  pretty  equally  balanced,  the  op- 
tion ought,  perhaps,  always  to  be  in  favor  of  leaving  industry  to  its  own  di- 
rection. 

But  the  system  which  has  been  mentioned,  is  far  from  characterizing  the 
general  policy  of  nations.  The  prevalent  one  has  been  regulated  by  an  op- 
posite spirit.  The  consequence  of  it  is,  that  the  United  States  are,  to  a  cer- 
tain extent,  in  the  situation  of  a  country,  precluded  from  foreign  commerce. 
They  can,  indeed,  without  difficulty,  obtain  from  abroad  the  manufactured 
supplies  of  which  they  are  in  want;  but  they  experience  numerous  and  very 
injurious  impediments  to  the  emission  and  vent  of  their  own  commodities. 
Nor  is  this  the  case  in  reference  to  a  single  foreign  nation  only.  The  regula- 
tions of  several  countries,  with  which  we  have  the  most  extensive  intercourse, 
throw  serious  obstructions  in  the  way  of  the  principal  staples  of  the  United 
States. 

In  such  a  position  of  things,  the  United  States  cannot  exchange  with  Eu- 
rope on  equal  terms;  and  the  want  of  reciprocity  would  render  them  the  vic- 
tim of  a  system  which  should  induce  them  to  confine  their  views  to  agricul- 
ture, and  refrain  from  manufactures.  A  constant  and  increasing  necessity,  on 
their  part,  for  the  commodities  of  Europe,  and  only  a  partial  and  occasional 
demand  for  their  own,  in  return,  could  not  but  expose  them  to  a  state  of  im- 
poverishment, compared  with  the  opulence  to  which  their  political  and  na- 
tural advantages  authorize  them  to  aspire. 

Remarks  of  this  kind  are  not  made  in  the  spirit  of  complaint.  It  is  for 
the  nations  whose  regulations  are  alluded  to,  to  judge  for  themselves, 
whether,  by  aiming  at  too  much,  they  do  not  lose  more  than  they  gain.  It  is 
for  the  United  States  to  consider,  by  what  means  they  can  render  themselves 
least  dependant  on  the  combinations,  right  or  wrong,  of  foreign  policy. 

It  is  no  small  consolation,  that  already  the  measures  which  have  embarrass- 
ed our  trade,  have  accelerated  internal  improvements,  which,  upon  the 
whole>  have  bettered  our  affairs.  To  diversify  and  extend  these  improve- 
ments, is  the  surest  and  safest  method  of  indemnifying  ourselves  for  any  in 
conveniences  which  those  or  similar  measures  have  a  tendency  to  beget.  If 
Europe  will  not  take  from  us  the  products  of  our  soil,  upon  terms  consistent 
with  our  interest,  the  natural  remedy  is  to  contract,  as  fast  as  possible,  our 
wants  of  her. 

2d.  The  conversion  of  their  waste  into  cultivated  lands,  is  certainly  a  point 
13 


3^  REPORTS  OF  THE  [1791 . 

of  great  moment,  in  the  political  calculations  of  the  United  States.  But  the 
degree  in  which  this  may  possibly  be  retarded,  by  the  encouragement  of 
manufactories,  does  not  appear  to  countervail  the  powerful  inducements  t© 
affording  that  encouragement. 

An  observation  made  in  another  place,  is  of  a  nature  to  have  great  influ- 
ence upon  this  question.  If  it  cannot  be  denied,  that  the  interests,  even  of 
agriculture,  may  be  advanced  more  by  having  such  of  the  lands  of  a  State  as 
are  occupied,  under  good  cultivation,  than  by  having  a  greater  quantity  oc- 
cupied under  a  much  inferior  cultivation;  and, if  manufactories,  for  the  rea- 
sons assigned,  must  be  admitted  to  have  a  tendency  to  promote  a  more  stea- 
dy and  vigorous  cultivation  of  the  lands  occupied,. than  would  happen  with- 
out them,  it  will  follow,  that  they  are  capable  of  indemnifying  a  country  for 
a  diminution  of  the  progress  of  new  settlements;  and  may  serve  to  increase 
both  the  capital  value  and  the  income  of  its  lands,  even  though  they 
should  abridge  the  number  of  acres  under  tillage. 

But  it  does,  by  no  means,  follow,  that  the  progress  of  new  settlements 
would  be  retarded  by  the  extension  of  manufactures.  The  desire  of  being  an 
independent  proprietor  of  land,  is  founded  on  such  strong  principles  in  the  hu- 
man breast,  that  where  the  opportunity  of  becoming  so  is  as  great  as  it  is  in 
the  United  States,  the  proportion  will  be  small  of  those  whose  situations 
would  otherwise  lead  to  it,  who  would  be  diverted  from  it  towards  manufac- 
tures. And  it  is  highly  probable,  as  already  intimated,  that  the  accessions 
of  foreigners  who,  originally  drawn  over  by  manufacturing  views,  would  af- 
terwards abandon  them  for  agricultural,  would  be  more  than  an  equivalent  for 
those  of  our  own  citizens  who  might  happen  to  be  detached  from  them. 

The  remaining  objections  to  a  particular  encouragement  of  manufactures 
in  the  United  States,  now  require  to  be  examined. 

One  of  these  turns  on  the  proposition,  that  industry,  if  left  to  itself,  will 
naturally  find  its  way  to  the  most  useful  and  profitable  employment.  Whence 
it  is  inferred,  that  manufactures,  without,  the  aid  of  government,  will  grow  up 
as  soon  and  as  fast  as  the  natural  state  of  things  and  the  interest  of  the  com- 
munity may  require. 

Against  the  solidity  of  this  hypothesis,  in  the  full  latitude  of  the  terms, 
very  cogent  reasons  may  be  offered.  These  have  relation  to  the  strong  influ- 
ence of  habit  and  the  spirit  of  imitation,  the  fear  of  want  of  success  in  untried 
enterprises,  the  intrinsic  difficulties  incident  to  first  essays  towards  a  com- 
petition with  those  who  have  previously  attained  to  perfection  in  the  business 
to  be  attempted,  the  bounties,  premiums  and  other  artificial  encouragements, 
with  which  foreign  nations  second  the  exertions  of  their  own  citizens,  in  the 
branches  in  which  they,  are  to  be  rivalled. 

Experience  teaches,  that  men  are  often  so  much  governed  by  what  they  are 
accustomed  to  see  and  practise,  that  the  simplest  and  most  obvious  improve-^ 
ments,  in  the  most  ordinary  occupations,  are  adopted  with  hesitation,  reluc- 
tance, and  by  slow  gradations.  The  spontaneous  transition  to  new  pursuits, 
in  a  community  long  habituated  to  different  ones, may  be  expected  to  be  attend- 
ed with  proportionally  greater  difficulty.  When  former  occupations  ceased 
to  yield  a  profit  adequate  to  the  subsistence  of  their  followers,  or  when  there 
was  an  absolute  deficiency  of  employment  in  them,  owing  to  the  superabun- 
dance of  hands,  changes  would  ensue;  but  these  changes  would  be  likely  t© 
be  more  tardy  than  might  consist  with  the  interest  either  of  individuals  or 
i  of  the  society.  In  many  cases  they  would  not  happen,  while  a  bare  support 
could  be  ensured  by  an  adherence  to  ancient  courses,  though  a  resort  to  a 


1791.]  SECRETARY  OF  THE  TREASURY.  93 

more  profitable  employment  might  be  practicable.  To  produce  the  desira- 
ble changes  as  early  as  may  be  expedient,  may  therefore  require  the  incite- 
ment and  patronage  of  government. 

The  apprehension  of  failing  in  new  attempts,  is,  perhaps,  a  mdre  serious 
impediment.  There  are  dispositions  apt  to  be  attracted  by  the  mere  novel- 
ty of  an  undertaking;  but  these  are  not  always  those  best  calculated  to  give 
it  success.  To  this,  it  is  of  importance,  that  the  confidence  of  cautious,  sa- 
gacious capitalists,  both  citizens  and  foreigners,  should  be  excited.  And  to 
inspire  this  description  of  persons  with  confidence,  it  is  essential  that  they 
should  be  made  to  see  in  any  project  which  is  new,  and  for  that  reason  alone, 
if  for  no  other,  precarious,  the  prospect  of  such  a  degree  of  countenance  and 
support  from  government,  as  may  be  capable  of  overcoming  the  obstacles 
inseparable  from  the  first  experiments. 

The  superiority  antecedently  enjoyed  by  nations  who  have  pre-occupied 
and  perfected  a  branch  of  industry,  constitutes  a  more  formidable  obstacle 
than  either  of  those  which  have  been  mentioned,  to  the  introduction  of  the 
same  branch  into  a  country  in  which  it  did  not  before  exist.  To  maintain, 
between  the  recent  establishments  of  one  country,  and  the  long  matured  es- 
tablishments of  another  country,  a  competition  upon  equal  terms,  both  as  to 
quality  and  price,  is,  in  most  cases,  impracticable.  The  disparity,  in  the 
one,  or  in  the  other,  or  in  both,  must  necessarily  be  so  considerable,  as  to 
forbid  a  successful  rivalship,  without  the  extraordinary  aid  and  protection  of 
government. 

But  the  greatest  obstacle  of  all  to  the  successful  prosecution  of  a  new 
branch  of  industry  in  a  country  in  which  it  was  before  unknown,  consists, 
as  far  as  the  instances  apply,  in  the  bounties,  premiums,  and  other  aids,  which 
are  granted  in  a  variety  of  cases,  by  the  nations  in  which  the  establishments 
to  be  imitated  are  previously  introduced.  It  is  well  known  (and  particular 
examples,  in  the  course  of  this  report  will  be  cited)  that  certain  nations 
grant  bounties  on  the  exportation  of  particular  commodities,  to  enable  their 
own  workmen  to  undersell  and  supplant  all  competitors,  in  the  countries  to 
which  those  commodities  are  sent.  Hence  the  undertakers  of  a  new  manufac- 
ture have  to  contend,  not  only  with  the  natural  disadvantages  of  a  new  un- 
dertaking, but  with  the  gratuities  and  remunerations  which  other  govern- 
ments bestow.  To  be  enabled  to  contend  with  success,  it  is  evident,  that 
the  interference  and  aid  of  their  own  governments  are  indispensable. 

Combinations  by  those  engaged  in  a  particular  branch  of  business,  in  one 
country,  to  frustrate  the  first  efforts  to  introduce  it  into  another,  by  tempo- 
rary sacrifices,  recompensed,  perhaps,  by  extraordinary  indemnifications  of 
the  government  of  such  country,  are  believed  to  have  existed,  and  are  not  to 
be  regarded  as  destitute  of  probability.  The  existence  or  assurance  of  aid 
from  the  government  of  the  country  in  which  the  business  is  to  be  introduced, 
may  be  essential  to  fortify  adventurers  against  the  dread  of  such  combi- 
nations— to  defeat  their  effects,  if  formed,  and  to  prevent  their  being  formed 
by  demonstrating  that  they  must  in  the  end  prove  fruitless. 

Whatever  room  there  may  be  for  an  expectation,  that  the  industry  of  a 
people,  under  the  direction  of  private  interest,  will,  upon  equal  terms,  find 
out  the  most  beneficial  employment  for  itself,  there  is  none  for  a  reliance, 
that  it  will  struggle  against  the  force  of  unequal  terms,  or  will,  of  itself,  sur- 
mount all  the  adventitious  barriers  to  a  successful  competition,  which  may 
have  been  erected,  either  by  the  advantages  naturally  acquired  from  practice, 
^and  previous  possession  of  the  ground,  or  by  those  which  may  have  sprun^ 


9  4  REPORTS  OF  THE  [1791, 

from  positive  regulations  and  an  artificial  policy.  This  general  reflection 
might  alone  suffice  as  an  answer  to  the  objection  under  examination;  exclu- 
sively of  the  weighty  considerations  which  have  been  particularly  urged. 

The  objections  to  the  pursuit  of  manufactures  in  the  United  States,  which 
next  present  themselves  to  discussion,  represent  an  impracticability  of  suc- 
cess, arising  from  three  causes — scarcity  of  hands,  dearness  of  labor,  want  of 
capital. 

The  two  first  circumstances  are,  to  a  certain  extent,  real;  and,  within  due 
limits,  ought  to  be  admitted  as  obstacles  to  the  success  of  manufacturing  en- 
terprise in  the  United  States.  But  there  are  various  considerations  which 
lessen  their  force,  and  tend  t©  afford  an  assurance,  that  they  are  not  sufficient 
to  prevent  the  advantageous  prosecution  of  many  very  useful  and  extensive 
manufactories. 

With  regard  to  scarcity  of  hands,  the  fact  itself  must  be  applied  with  no 
small  qualification  to  certain  parts  of  the  United  States.  There  are  large 
districts  which  may  be  considered  as  pretty  fully  peopled;  and  which,  not- 
withstanding a  continual  drain  for  distant  settlement,  are  thickly  interspersed 
with  flourishing  and  increasing  towns.  If  these  districts  have  not  already 
reached  the  point  at  which  the  complaint  of  scarcity  of  hands  ceases,  they 
are  not  remote  from  it,  and  are  approaching  fast  towards  it:  And  havings 
perhaps,  fewer  attractions  to  agriculture  than  some  other  parts  of  the 
Union,  they  exhibit  a  proportionally  stronger  tendenc)7  towards  other  kinds 
of  industry.  In  these  districts  may  be  discerned  no  inconsiderable  maturity 
for  manufacturing  establishments. 

But  there  are  circumstances,  which  have  been  already  noticed,  with  another 
view,  that  materially  diminish,  every  where,  the  effect  of  a  scarcity  of 
hands.  These  circumstances  are — the  great  use  which  can  he  made  of  wo- 
men and  children;  on  which  point  a  very  pregnant  and  instructive  fact  has 
been  mentioned;  the  vast  extension  given  by  late  improvements  to  the  em- 
ployment, of  machines,  which,  substituting  the  agency  of  fire  and  water,  has 
prodigiously  lessened  the  necessity  for  manual  labor;  the  employment  of 
persons  ordinarily  engaged  in  other  occupations,  during  the  seasons  or  hours 
of  leisure;  which,  besides  giving  occasion  to  the  exertion  of  a  greater  quan- 
tity of  labor,  by  the  same  number  of  persons,  and  thereby  increasing  the  ge- 
neral stock  of  labor,  as  has  been  elsewhere  remarked,  may  also  be  taken 
into  the  calculation,  as  a  resource  for  obviating  the  scarcity  of  hands :  lastly, 
the  attraction  of  foreign  emigrants.  Whoever  inspects,  with  a  careful  eye, 
the  composition  of  our  towns,  will  be  made  sensible  to  what  an  extent  this 
resource  may  be  relied  upon.  This  exhibits  a  large  proportion  of  ingenious 
and  valuable  workmen  in  different  arts  and  trades,  who,  by  expatriating 
from  Europe,  have  improved  their  own  condition,  and  added  to  the  indus- 
try and  wealth  of  the  United  States.  It  is  a  natural  inference  from  the  ex- 
perience we  have  already  had,  that,  as  soon  as  the  United  States  shall  present 
the  countenance  of  a  serious  prosecution  of  manufactures,  as  soon  as  foreign 
artists  shall  be  made  sensible  that  the  state  of  things  here  affords  a  moral 
certainty  of  employment  and  encouragement,  competent  numbers  of  Euro- 
pean workmen  will  transplant  themselves,  effectually  to  ensure  the  success 
of  the  design.  How,  indeed,  can  it  otherwise  happen,  considering  the  various 
and  powerful  inducements  which  the  situation  of  this  country  offers;  ad- 
dressing themselves  to  so  many  strong  passions  and  feelings,  to  so  many  ge- 
neral and  particular  interests. 

It  may  be  affirmed,  therefore,  in  respect  to  hands  for  carrying  on  manu- 


1791.]  SECRETARY  OF  THE  TREASURY.  95 

iactures,  that  we  shall,  in  a  great  measure,  trade  upon  a  foreign  stock,  reserv- 
ing our  own  for  the  cultivation  of  our  lands  and  the  manning  of  our  ships, 
as  far  as  character  and  circumstances  shall  incline.  It  is  not  unworthy  of  re- 
mark, that  the  objection  to  the  success  of  manufactures,  deduced  from  the 
scarcity  of  hands,  is  alike  applicable  to  trade  and  navigation,  and  yet  these 
are  perceived  to  flourish,  without  any  sensible  impediment  from  that  cause. 

As  to  the  dearness  of  labor,  (another  of  the  obstacles  alleged,)  this  has  re- 
lation principally  to  two  circumstances:  one,  that  which  has  just  been  dis- 
cussed, or  the  scarcity  of  hands;  the  other,  the  greatness  of  profits. 

As  far  as  it  is  a  consequence  of  the  scarcity  of  hands,  it  is  mitigated  by  all 
the  considerations  which  have  been  adduced  as  lessening  that  deficiency. 
It  is  certain,  too,  that  the  disparity  in  this  respect,  between  some  of  the 
most  manufacturing  parts  of  Europe,  and  a  large  proportion  of  the  United 
States,  is  not  nearly  so  great  as  is  commonly  imagined.  It  is  also  much  less 
in  regard  to  artificers  and  manufacturers,  than  in  regard  to  country  laborers; 
and  while  a  careful  comparison  shows  that  there  is,  in  this  particular,  much 
exaggeration;  it  is  also  evident,  that  the  effect  of  the  degree  of  disparity, 
which  does  truly  exist,  is  diminished  in  proportion  to  the  use  which  can  be 
made  of  machinery. 

To  illustrate  this  last  idea,  let  it  be  supposed  that  the  difference  of  price, 
in  two  countries,  of  a  given  quantity  of  manual  labor  requisite  to  the  fabri- 
cation of  a  given  article,  is  as  ten ;  and  that  some  mechanic  power  is  intro- 
duced into  both  countries,  which,  performing  half  the  necessary  labor,  leaves 
only  half  to  be  done  by  hand;  it  is  evident  that  the  difference  in  the  cost  of 
the  fabrication  of  the  article  in  question,  in  the  two  countries,  as  far  as  it  is 
connected  with  the  price  of  labor,  will  be  reduced  from  ten  to  five,  in  con- 
sequence of  the  introduction  of  that  power. 

This  circumstance  is  worthy  of  the  most  particular  attention.  It  dimin- 
ishes immensely  one  of  the  objections  most  strenuously  urged  against  the 
success  of  manufactures  in  the  United  States. 

To  procure  all  such  machines  as  are  known  in  any  part  of  Europe,  can 
only  require  a  proper  provision  and  due  pains.  The  knowledge  of  several 
of  the  most  important  of  them  is  already  possessed.  The  preparation  of 
them  here  is,  in  most  cases,  practicable  on  nearly  equal  terms.  As  far  as 
they  depend  on  water,  some  superiority  of  advantages  may  be  claimed,  from 
the  uncommon  variety  and  greater  cheapness  of  situations  adapted  to  mill- 
seats,  with  which  different  parts  of  the  United  States  abound, 

So  far  as  the  dearness  of  labor  may  be  a  consequence  of  the  greatness 
of  profits  in  any  branch  of  business,  it  is  no  obstacle  to  its  success.  The 
undertaker  can  afford  to  pay  the  price. 

There  are  grounds  to  conclude,  that  undertakers  of  manufactures  in  this 
country,  can,  at  this  time,  afford  to  pay  higher  wages  to  the  workmen  they 
may  employ,  than  are  paid  to  similar  workmen  in  Europe.  The  prices  of 
foreign  fabrics,  in  the  markets  of  the  United  States,  which  will,  for  a  long 
time,  regulate  the  prices  of  the  domestic  ones,  may  be  considered  as  com- 
pounded of  the  following  ingredients.  The  first  cost  of  materials,  including 
the  taxes,  if  any,  which  are  paid  upon  them  where  they  are  made;  the  ex- 
pense of  grounds,  buildings,  machinery  and  tools;  the  wages  of  the  persons 
employed  in  the  manufactory;  the  profits  on  the  capital  or  stock  employed; 
the  commissions  of  agents  to  purchase  them  where  they  are  made;  the  ex- 
pense of  transportation  to  the  United  States,  including  insurance  and  other- 
incidental  charges;  the  taxes  or  duties,  if  any,  and  fees  of  office,  which  are 


9  6  REPORTS  OF  THE  [1791. 

paid  on  their  exportation;  the  taxes  or  duties,  and  fees  of  office,  which  are 
paid  on  their  importation. 

As  to  the  first  of  these  items,  the  cost  of  materials,  the  advantage,  upon 
the  whole,  is  at  present  on  the  side  of  the  United  States;  and  the  difference 
in  their  favor  must  increase,  in  proportion  as  a  certain  and  extensive  do- 
mestic demand  shall  induce  the  proprietors  of  land  to  devote  more  of  their 
attention  to  the  production  of  those  materials.  It  ought  not  to  escape  ob- 
servation, in  a  comparison  on  this  point,  that  some  of  the  principal  manu- 
facturing countries  of  Europe  are  much  more  dependant  on  foreign  supply 
for  the  materials  of  their  manufactures,  than  would  be  the  United  States, 
who  are  capable  of  supplying  themselves  with  a  greater  abundance,  as  well 
as  a  greater  variety  of  the  requisite  materials. 

As  to  the  second  item,  the  expense  of  grounds,  buildings,  machinery,  and 
tools,  an  equality,  at  least,  may  be  assumed;  since  advantages,  in  some  par- 
ticulars, will  counterbalance  temporary  disadvantages  in  others. 

As  to  the  third  item,  or  the  article  of  wages,  the  comparison  certainly 
turns  against  the  United  States;  though,  as  before  observed,  not  in  so  great 
a  degree  as  is  commonly  supposed. 

The  fourth  item  is  alike  applicable  to  the  foreign  and  to  the  domestic  ma- 
nufacture. It  is,  indeed,  more  properly  a  result,  than  a  particular  to  be 
compared. 

But  with  respect  to  all  the  remaining  items,  they  are  alone  applicable  to 
the  foreign  manufacture,  and,  in  the  strictest  sense,  extraordinaries;  consti- 
tuting a  sum  of  extra  charge  on  the  foreign  fabric,  which  cannot  be  esti- 
mated at  less  than  from  fifteen  to  thirty  per  cent,  on  the  cost  of  it  at  the 
manufactory. 

This  sum  of  extra  charge  may  confidently  be  regarded  as  more  than  a 
counterpoise  for  the  real  difference  in  the  price  of  labor;  and  is  a  satisfactory 
proof  that  manufactures  may  prosper,  in  defiance  of  it,  in  the  United  States. 

To  the  general  allegation,  connected  with  the  circumstances  of  scarcity 
of  hands  and  dearness  of  labor,  that  extensive  manufactures  can  only  grow 
out  of  a  redundant  or  full  population,  it  will  be  sufficient  to  answer  general- 
ly, that  the  fact  has  been  otherwise.  That  the  situation  alleged  to  be  an 
essential  condition  of  success,  has  not  been  that  of  several  nations,  at  pe- 
riods when  they  had  already  attained  to  maturity  in  a  variety  of  manufac- 
tures. 

The  supposed  want  of  capital  for  the  prosecution  of  manufactures  in  the 
United  States,  is  the  most  indefinite  of  the  objections  which  are  usually 
opposed  to  it. 

It  is  very  difficult  to  pronounce  any  thing  precise  concerning  the  real  ex- 
tent of  the  monied  capital  of  a  country,  and  still  more  concerning  the  pro- 
portion w%iich  it  bears  to  the  objects  that  invite  the  employment  of  capital. 
It  is  not  less  difficult  to  pronounce,  how  far  the  effect  of  any  given  quantity 
of  money,  as  capita],  or  in  other  words,  as  a  medium  for  circulating  the 
industry  and  property  of  a  nation,  may  be  increased  by  the  very  circum- 
stance of  the  additional  motion  which  is  given  to  it,  by  new  objects  of  em- 
ployment. That  effect,  like  the  momentum  of  descending  bodies,  may  not 
improperly  be  represented  as  in  a  compound  ratio  to  mass  and  velocity. 
It  seems  pretty  certain,  that  a  given  sum  of  money,  in  a  situation  in  which 
the  quick  impulses  of  commercial  activity  were  little  felt,  would  appear  in- 
adequate to  the  circulation  of  as  great  a  quantity  of  industry  and  property, 
as  in  one  in  which  their  full  influence  was  experienced. 


1791.1  SECRETARY  OF  THE  TREASURY.  97 

It  is  not  obvious  why  the  same  objection  might  not  as  well  be  made  to 
external  commerce,  as  to  manufactures;  since  it  is  manifest,  that  our  im- 
mense tracts  of  land,  occupied  and  unoccupied,  are  capable  of  giving  em- 
ployment to  more  capital  than  is  actually  bestowed  on  them.  It  is  cer- 
tain that  the  United  States  offer  a  vast  field  for  the  advantageous  employ- 
ment of  capital;  but  it  does  not  follow  that  there  will  not  be  found,  in  one 
way  or  another,  a  sufficient  fund  for  the  successful  prosecution  of  any  spe- 
cies of  industry  which  is  likely  to  prove  truly  beneficial. 

The  following  considerations  are  of  a  nature  to  remove  all  inquietude  on 
the  score  of  want  of  capital. 

The  introduction  of  banks,  as  has  been  shown  on  another  occasion,  has  a 
powerful  tendency  to  extend  the  active  capital  of  a  country.  Experience 
of  the  utility  of  these  institutions,  is  multiplying  them  in  the  United  States. 
It  is  probable  that  they  will  be  established  wherever  they  can  exist  with  ad- 
vantage; and  wherever  they  can  be  supported,  if  administered  with  pru- 
dence, they  will  add  new  energies  to  all  pecuniary  operations. 

The  aid  of  foreign  capital  may  safely,  and  with  considerable  latitude,  be 
taken  into  calculation.  Its  instrumentality  has  been  long  experienced  in 
our  external  commerce;  and  it  has  begun  to  be  felt  in  various  other  modes. 
Not  only  our  funds,  but  our  agriculture,  and  other  internal  improvements, 
have  been  animated  by  it.  It  has  already,  in  a  few  instances,  extended  even 
to  our  manufactures. 

It  is  a  well  known  fact,  that  there  are  parts  of  Europe  which  have  more 
capital  than  profitable  domestic  objects  of  employment.  Hence,  among 
other  proofs,  the  large  loans  continually  furnished  to  foreign  States.  And 
it  is  equally  certain,  that  the  capital  of  other  parts  may  find  more  profitable 
employment  in  the  United  States  than  at  home.  And,  notwithstanding 
there  are  weighty  inducements  to  prefer  the  employment  of  capital  at 
home,  even  at  less  profit,  to  an  investment  of  it  abroad,  though  with  greater 
gain,  yet  these  inducements  are  overruled,  either  by  a  deficiency  of  em- 
ployment, or  by  a  very  material  difference  in  profit.  Both  these  causes 
operate  to  produce  a  transfer  of  foreign  capital  to  the  United  States.  It  is 
certain  that  various  objects  in  this  country  hold  out  advantages,  which  are 
with  difficulty  to  be  equalled  elsewhere;  and  under  the  increasingly  favorable 
impressions  which  are  entertained  of  our  government,  the  attractions  will 
become  more  and  more  strong.  These  impressions  will  prove  a  rich  mine 
of  prosperity  to  the  country,  if  they  are  confirmed  and  strengthened  by  the 
progress  of  our  affairs.  And,  to  secure  this  advantage,  little  more  is  neces- 
sary, than  to  foster  industry,  and  cultivate  order  and  tranquillity,  at  home 
and  abroad. 

It  is  not  impossible,  that  there  may  be  persons  disposed  to  look,  with  a 
jealous  eye,  on  the  introduction  of  foreign  capital,  as  if  it  were  an  instrument 
to  deprive  our  own  citizens  of  the  profits  of  our  own  industry :  But,  perhaps, 
there  never  could  be  a  more  unreasonable  jealousy.  Instead  of  being  viewed 
as  a  rival,  it  ought  to  be  considered  as  a  most  valuable  auxiliary;  conducing 
to  put  in  motion  a  greater  quantity  of  productive  labor,  and  a  greater  portion 
of  useful  enterprise,  than  could  exist  without  it.  It  is  at  least  evident, 
that  in  a  country  situated  like  the  United  States,  with  an  infinite  fund  of  re- 
sources yet  to  be  unfolded,  every  farthing  of  foreign  capital  which  is  laid 
out  in  internal  meliorations,  and  in  industrious  establishments  of  a  perma- 
nent nature,  is  a  precious  acquisition. 

And,  whatever   be  the   objects  which   originally  attract  foreign   capital, 


98  REPORTS  OF  THE  [1791, 

when  once  introduced,  it  may  be  directed  towards  any  purpose  of  beneficial 
exertion,  which  is  desired.  And  to  detain  it  among  us,  there  can  be  no  ex- 
pedient so  effectual,  as  to  enlarge  the  sphere  within  which  it  may  be  use- 
fully employed:  though  introduced  merely  with  views  to  speculations  in 
the  funds,  it  may  afterwards  be  rendered  subservient  to  the  interests  of  agri- 
culture, commerce,  and  manufactures. 

But  the  attraction  of  foreign  capital  for  the  direct  purpose  of  manufactures* 
ought  not  to  be  deemed  a  chimerical  expectation.  There  are  already  ex- 
amples of  it,  as  remarked  in  another  place.  And  the  examples,  if  the 
disposition  be  cultivated,  can  hardly  fail  to  multiply.  There  are  also  instances 
of  another  kind,  which  serve  to  strengthen  the  expectation;  enterprises  for 
improving  the  public  communications,  by  cutting  canals,  opening  the  obstruc- 
tions in  rivers,  and  erecting  bridges,  have  received  very  material  aid  from 
the  same  source. 

When  the  Thanu  factoring  capitalist  of  Europe  shall  advert  to  the  many 
important  advantages  which  have  been  intimated  in  the  course  of  this  re- 
port, he  cannot  but  perceive  very  powerful  inducements  to  a  transfer  of 
himself  and  his  capital  to  the  United  States.  Among  the  reflections  which 
a  most  interesting  peculiarity  of  situation  is  calculated  to  suggest,  it  can- 
not escape  his  observation,  as  a  circumstance  of  moment  in  the  calculation? 
that  the  progressive  population  and  improvement  of  the  United  States,  en- 
sure a  continually  increasing  domestic  demand  for  the  fabrics  which  he  shall 
produce,  not  to  be  affected  by  any  external  casualties  or  vicissitudes. 

But,  while  there  are  circumstances  sufficiently  strong  to  authorize  a  con- 
siderable degree  of  reliance  on  the  aid  of  foreign  capital,  towards  the  attain- 
ment of  the  object  in  view,  it  is  satisfactory  to  have  good  grounds  of  assur- 
ance, that  there  are  domestic  resources  of  themselves  adequate  to  it.  It 
happens  that  there  is  a  species  of  capital,  actually  existing  with  the  United 
States,  which  relieves  from  all  inquietude,  on  the  score  of  want  of  capital. 
This  is  the  funded  debt. 

The  effect  of  a  funded  debt,  as  a  species  of  capital,  has  been  noticed  upon 
a  former  occasion;  but  a  more  particular  elucidation  of  the  point  seems  to  be 
required  by  the  stress  which  is  here  laid  upon  it.  This  shall,  accordingly, 
be  attempted. 

Public  funds  answer  the  purpose  of  capital,  from  the  estimation  in  which 
they  are  usually  held  by  monied  men;  and  consequently  from  the  ease  and 
despatch  with  which  they  can  be  turned  into  money.  This  capacity  of 
prompt  convertibility  into  money,  causes  a  transfer  of  stock  to  be,  in  a  great 
number  of  cases,  equivalent  to  a  payment  in  coin.  And  where  it  does  not 
happen  to  suit  the  party  who  is  to  receive,  to  accept  a  transfer  of  stock,  the 
party  who  is  to  pay,  is  never  at  a  loss  to  find,  elsewhere,  a  purchaser  of  his 
stock,  who  will  furnish  him,  in  lieu  of  it,  with  the  coin  of  which  he  stands 
in  need. 

Hence,  in  a  sound  and  settled  state  of  the  public  funds,  a  man  possessed  of 
a  sum  in  them,  can  embrace  any  scheme  of  business  which  offers,  with  as 
much  confidence  as  if  he  were  possessed  of  an  equal  sum  in  coin. 

This  operation  of  public  funds  as  capital,  is  too  obvious  to  be  denied;  but 
it  is  objected  to  the  idea  of  their  operating  as  an  augmentation  of  the  capital 
of  the  community,  that  they  serve  to  occasion  the  destruction  of  some  other 
capital,  to  an  equal  amount. 

The  capital,  which  alone  they  can  be  supposed  to  destroy,  must  consist  of— 

The  annual  revenue,  which  is  applied   to  the  payment  of  interest  on  the 


1791.1  SECRETARY  OF  THE  TREASURY.  99 

debt,  and  to  the  gradual  redemption  of  the  principal — the  amount  of  the 
coin,  which  is  employed  in  circulating  the  funds,  or,  in  other  words, in  effect* 
ing  the  different  alienations  which  they  undergo. 

But  the  following  appears  to  be  the  true  and  accurate  view  of  this  matter; 

1st.  As  to  the  point  of  the  annual  revenue  requisite  for  payment  of  inter- 
est and  redemption  of  principal. 

As  a  determinate  proportion  will  tend  to  perspicuity  in  the  reasoning,  let 
it  be  supposed  that  the  annual  revenue  to  be  applied,  corresponding  with 
the  modification  of  the  six  per  cent,  stock  of  the  United  States,  is  in  the  ratio 
of  eight  upon  the  hundred;  that  is,  in  the  first  instance,  six  on  account  of  in- 
terest, and  two  on  account  of  principal. 

Thus  far,  it  is  evident,  that  the  capital  destroyed,  to  the  capital  created, 
would  bear  no  greater  proportion  than  eight  to  one  hundred.  There  would 
be  withdrawn,  from  the  total  mass  of  other  capitals,  a  sum  of  eight  dollars  to 
be  paid  to  the  public  creditor;  while  he  would  be  possessed  of  a  sum  of  one 
hundred  dollars,  ready  to  be  applied  to  any  purpose,  to  be  embarked  in  any 
enterprise  which  might  appear  to  him  eligible — Here,  then,  the  augmenta- 
tion of  capital,  or  the  excess  of  that  which  is  produced  beyond  that  which  is 
destroyed,  is  equal  to  ninety-two  dollars 

To  this  conclusion  it  may  be  objected,  that  the  sum  of  eight  dollars  is  to 
be  withdrawn  annually,  until  the  whole  hundred  is  extinguished;  and  it  may 
be  inferred,  that,  in  process  of  time,  a  capital  will  be  destroyed  equal  to  that 
which  is  at  first  created. 

But  it  is  nevertheless  true,  that  during  the  whole  of  the  interval,  between 
the  creation  of  the  capital  of  one  hundred  dollars,  and  its  reduction  to  a  sum 
not  greater  than  that  of  the  annual  revenue  appropriated  to  its  redemption,, 
there  will  be  a  greater  active  capital  in  existence,  than  if  no  debt  had  been 
contracted.  The  sum  drawn  from  other  capitals  in  any  one  year  will  not  ex- 
ceed eight  dollars;  but  there  will  be,  at  every  instant  of  time  during  the 
whole  period  in  question,  a  sum  corresponding  with  so  much  of  the  princi- 
pal as  remains  unredeemed,  in  the  hands  of  some  person  or  other,  employ- 
ed, or  ready  to  be  employed  in  some  profitable  undertaking.  There  will, 
therefore,  constantly  be  more  capital  in  capacity  to  be  employed,  than  capi- 
tal taken  from  employment.  The  excess,  for  the  first  year,  has  been  stated 
to  be  ninety-two  dollars;  it  will  diminish  yearly;  but  there  always  will  be  an 
excess,  until  the  principal  of  the  debt  is  brought  to  a  level  with  the  redeem- 
ing annuity;  that  is,  in  the  case  which  has  been  assumed,  by  way  of  exam- 
ple, to  eight  dollars.  The  reality  of  this  excess  becomes  palpable,  if  it  be 
supposed,  as  often  happens,  that  the  citizen  of  a  foreign  country  imports  in- 
to the  United  one  hundred  dollars  for  the  purchase  of  an  equal  sum  of  pub- 
lic debt — here  is  an  absolute  augmentation  of  the  mass  of  circulating  coin  to 
the  extent  of  one  hundred  dollars.  At  the  end  of  a  year,  the  foreigner  is 
presumed  to  draw  back  eight  dollars  on  account  of  his  principal  and  interest, 
but  he  still  leaves  ninety-two  of  his  original  deposite  in  circulation,  as 
he,  in  like  manner,  leaves  eighty -four  at  the  end  of  the  second  year,  draw- 
ing back  then  also  the  annuity  of  eight  dollars.  And  thus  the  matter  pro- 
ceeds: the  capital  left  in  circulation  diminishing,  each  year,  and  com- 
ing nearer  to  the  level  of  the  annuity  drawn  back.  There  are,  how- 
ever, some  differences  in  the  ultimate  operation  of  the  part  of  the  debt 
which  is  purchased  by  foreigners,  and  that  which  remains  in  the  hands  of 
citizens.  But  the  general  effect  in  each  case,  though  in  different  degrees, 
is  to  add  to  the  active  capital  of  the  country, 
14 


100  Reports  of  the  [1791, 

Hitherto  the  reasoning  has  proceeded  on  a  concession  of  the  position,  that 
there  is  a  destruction  of  some  other  capital,  to  the  extent  of  the  annuity  ap- 
propriated to  the  payment  of  the  interest,  and  the  redemption  of  the  princi- 
pal of  the  debt;  but  in  this  too  much  has  been  conceded.  There  is,  at  most, 
a  temporary  transfer  of  some  other  capital,  to  the  amount  of  the  annuity, 
from  those  who  pay  to  the  creditor,  who  receives;  whichhe  again  restores  to 
the  circulation,  to  resume  the  offices  of  a  capital.  This  he  does  either  imme- 
diately, by  employing  the  money  in  some  branch  of  industry,  or  mediate- 
ly, by  lending  it  to  some  other  person,  who  does  so  employ  it,  or  by  spend- 
ing it  on  his  own  maintenance.  In  either  supposition,  there  is  no  destruc- 
tion of  capital;  there  is  nothing  more  than  a  suspension  of  its  motion  for  a 
time:  that  is,  while  it  is  passing  from  the  hands  of  those  who  pay  into  the 
public  coffers,  and  thence  through  the  public  creditor  into  some  other  channel 
of  circulation. — When  the  payments  of  interest  are  periodical  and  quick,  and 
made  by  the  instrumentality  of  banks,  the  diversion  or  suspension  of  capital 
may  almost  be  denominated  momentary.  Hence  the  deduction,  on  this  ac- 
count, is  far  less  than  it  at  first  sight  appears  to  be. 

There  is  evidently,  as  far  as  regards  the  annuity,  no  destruction  nor  trans- 
fer of  any  other  capital  than  that  portion  of  the  income  of  each  individual, 
which  goes  to  make  up  the  annuity.  The  land  which  furnishes  the  farmer 
with  the  sum  which  he  is  to  contribute,  remains  the  same;  and  the  like  may 
be  observed  of  other  capitals.  Indeed,  as  far  as  the  tax,  which  is  the  object 
of  contribution  (as  frequently  happens,  when  it  does  not  oppress  by  its  weight) 
may  have  been  a  motive  to  greater  exertion  in  any  occupation,  it  may  even 
serve  to  increase  the  contributory  capital.  This  idea  is  not  without  import- 
ance in  the  general  view  of  the  subject. 

It  remains  to  see,  what  farther  deduction  ought  to  be  made  from  the  capi- 
tal which  is  created,  by  the  existence  of  the  debt,  on  account  of  the  coin  which 
is  employed  in  its  circulation.  This  is  susceptible  of  much  less  precise  cal- 
culation, than  the  article  which  has  been  just  discussed.  It  is  impossible  to 
say  what  proportion  of  coin  is  necessary  to  carry  on  the  alienations  which 
any  species  of  property  usually  undergoes.  The  quantity,  indeed,  varies  ac- 
cording to  circumstances.  But  it  may  still,  without  hesitation,  be  pronounced, 
from  the  quickness  of  the  rotation,  or  rather  of  the  transitions,  that  the  me- 
dium of  circulation  always  bears  but  a  small  proportion  to  the  amount  of  the 
property  circulated.  And  it  is  thence  satisfactorily  deducible,  that  the  coin 
employed  in  the  negotiations  of  the  funds,  and  which  serves  to  give  them  ac- 
tivity, as  capital,  is  incomparably  less  than  the  sum  of  the  debt  negotiated 
for  the  purpose  of  business. 

It  ought  not,  however,  to  be  omitted,  thatthe  negotiation  of  the  funds'becomes 
itself  a  distinct  business;  which  employs,  and  by  employing,  diverts  a  por- 
tion of  the  circulating  coin  from  other  pursuits.  But  making  due  allowance 
for  this  circumstance,  there  is  no  reason  to  conclude,  that  the  effect  of  the 
diversion  of  coin,  in  the  whole  operation,  bears  any  considerable  proportion 
to  the  amount  of  the  capital,  to  which  it  gives  activity.  The  sum  of  the 
debt  in  circulation  is  continually  at  the  command  of  any  useful  enterprise:  the 
coin  itself  which  circulates  it,  is  never  more  than  momentarily  suspended 
from  its  ordinary  functions.  It  experiences  an  incessant  and  rapid  flux  and  re- 
flux, toand  from  the  channels  of  industry  to  those  of  speculations  in  the  funds. 

There  are  strong  circumstances  in  confirmation  of  this  theory.  The  force 
of  monied  capital,  which  has  been  displayed  in  Great  Britain,  and  the  height  to 
which  every  species  of  industry  has  grown  up  under  it,  defy  a  solution  from 


1791.1  SECRETARY  OF  THE  TREASURY.  101 

the  quantity  of  coin  which  that  kingdom  has  ever  possessed.  Accordingly, 
it  has  been  coeval  with  its  funding  system,  the  prevailing  opinion  of  the  men 
of  business,  and  of  the  generality  of  the  most  sagacious  theorists  of  that  coun- 
try, that  the  operation  of  the  public  funds,  as  capital,  has  contributed  to  the 
effect  in  question.  Among  ourselves,  appearances  thus  far  favor  the  same 
conclusion.  Industry,  in  general,  seems  to  have  been  re-animated. 
There  are  symptoms  indicating  an  extension  of  our  commerce.  Our 
navigation  has  certainly,  of  late,  had  a  considerable  spring,  and  there 
appears  to  be,  in  many  parts  of  the  Union,  a  command  of  capital,  which,  till 
lately,  since  the  revolution  at  least,  was  unknown.  But  it  is  at  the  same  time 
to  be  acknowledged,  that  other  circumstances  have  concurred,  (and  in  a  great 
degree,)  in  producing  the  present  state  of  things,  and  that  the  appearances 
are  not  yet  sufficiently  decisive  to  be  entirely  relied  upon. 

In  the  question  under  discussion,  it  is  important  to  distinguish  between  an 
absolute  increase  of  capital,  or  an  accession  of  real  wealth,  and  an  artificial  in-^ 
crease  of  capital,  as  an  engine  of  business,  or  as  an  instrument  of  industry  and 
commerce.  In  the  first  sense,  a  funded  debt  has  no  pretensions  to  being 
deemed  an  increase  of  capital;  in  the  last,  it  has  pretensions  which  are  not 
easy  to  be  controverted.  Of  a  similar  nature  is  bank  credit;  and,  in  an  in- 
ferior degree,  every  species  of  private  credit. 

But  though  a  funded  debt  is  not,  in  the  first  instance,  an  absolute  increase 
of  capital,  or  an  augmentation  of  real  wealth;  yet  by  serving  as  a  new  power 
in  the  operations  of  industry,  it  has,  within  certain  bounds,  a  tendency  to  in- 
crease the  real  wealth  of  a  community;  in  like  manner,  as  money  borrowed 
by  a  thrifty  farmer,  to  be  laid  out  in  the  improvement  of  his  farm,  may,  in 
the  end,  add  to  his  stock  of  real  riches. 

There  are  respectable  individuals,  who,  from  a  just  aversion  to  an  accu- 
mulation of  public  debt,  are  unwilling  to  concede  to  it  any  kind  of  utility, 
who  can  discern  no  good  to  alleviate  the  ill  with  which  they  suppose  it 
pregnant;  who  cannot  be  persuaded  that  it  ought,  in  any  sense,  to  be  view- 
ed as  an  increase  of  capital,  lest  it  should  be  inferred,  that  the  more  debt  the 
more  capital,  the  greater  the  burthens  the  greater  the  blessings  of  the  com- 
munity. 

But  it  interests  the  public  councils  to  estimate  every  object  as  it  truly  is, 
to  appreciate  how  far  the  good,  in  any  measure,  is  compensated  by  the  ill, 
or  the  ill  by  the  good:  either  of  them  is  seldom  unmixed. 

Neither  will  it  follow  that  an  accumulation  of  debt  is  desirable,  because  a 
certain  degree  of  it  operates  as  capital.  There  may  be  a  plethora  in  the  po- 
litical as  in  the  natural  body;  there  may  be  a  state  of  things  in  which  any 
such  artificial  capital  is  unnecessary.  The  debt,  too,  may  be  swelled  to  such 
a  size  as  that  the  greatest  part  of  it  may  cease  to  be  useful  as  a  capital,  serving 
only  to  pamper  the  dissipation  of  idle  and  dissolute  individuals;  as  that 
the  sums  required  to  pay  the  interest  upon  it  may  become  oppressive,  and 
beyond  the  means  which  a  government  can  employ,  consistently  with  its 
tranquillity,  to  raise  them;  as  that  the  resources  of  taxation  to  face  the  debt 
may  have  been  strained  too  far  to  admit  of  extensions  adequate  to  exigencies, 
which  regard  the  public  safety. 

Where  this  critical  point  is  cannot  be  pronounced;  but  it  is  impossible  to 
believe  that  there  is  not  such  a  point. 

And  as  the  vicissitudes  of  nations  beget  a  perpetual  tendency  to  the- accu- 
mulation of  debt,  there  ought  to  be,  in  every  government,  a  perpetual,  anxi- 
ous, and  unceasing  effort  to  reduce  that  which  at  any  time  exists,  as  fast  as 
phall  be  practicable,  consistently  with  integrity  and  good  faith- 


j 02       ]  REPORTS  OF  THE  fl79i; 

Reasonings  on  a  subject  comprehending  ideas  so  abstract  and  complex,  so 
little  reducible  to  a  precise  calculation,  as  those  which  enter  into  the  question 
just  discussed,  are  always  attended  with  a  danger  of  running  into  fallacies. 
Due  allowance  ought,  therefore,  to  be  made  for  this  possibility.  But,  as  far 
as  the  nature  of  the  subject  admits  of  it,  there  appears  to  be  satisfactory 
ground  for  a  belief  that  the  public  funds  operate  as  a  resource  of  capital  to 
the  citizens  of  the  United  States;  and,  if  they  are  a  resource  at  all,  it  is  an 
extensive  one. 

To  all  the  arguments  which  are  brought*  to  evince  the  impracticability  of 
success  in  manufacturing  establishments  in  the  United  States,  it  might  have 
been  a  sufficient  answer  to  have  referred  to  the  experience  of  what  has  been 
already  done.  It  is  certain  that  several  important  branches  have  grown  up 
and  flourished  with  a  rapidity  which  surprises,  affording  an  encouraging  as- 
surance of  success  in  future  attempts:  of  these  it  may  not  be  improper  to  enu- 
merate the  most  considerable. 

I.  Of  Skins. — Tanned  and  tawed  leather,  dressed  skins,  shoes,  boots, 
and  slippers,  harness,  and  saddlery  of  all  kinds,  portmanteaus  and  trunks, 
leather  breeches,  gloves,  muffs  and  tippets,  parchment  and  glue. 

II.  Of' Iron.— Bar  and  sheet  iron,  steel  nail  rods  and  nails,  implements 
of  husbandry,  stoves,  pots,  and  other  household  utensils,  the  steel  and  iron 
work  of  carriages,  and  for  ship  building,  anchors,  scale  beams  and  weights, 
and  various  tools  of  artificers,  arms  of  different  kinds;  though  the  manufac- 
ture of  these  last  has  of  late  diminished  for  want  of  demand. 

III.  Of  Wood. — Ships,  cabinet  wares,  and  turnery,  wool  and  cotton 
cards,  and  other  machinery  for  manufactures  and  husbandry,  mathematical 
instruments,  coopers'  wares  of  everjr  kind. 

IV.  Of  Flax  and  Hemp. — Cables,  sail  cloth,  cordage,  twine,  and  pack 
thread. 

V.  Bricks  and  coarse  tiles,  and  potters'  wares. 

VI.  Ardent  spirits  and  malt  liquors. 

VII.  Writing  and  printing  paper,  sheathing  and  wrapping  paper,  paste 
boards,  fullers  or  press  papers,  paper  hangings. 

VIII.  Hats  of  fur  and  wool,  and  of  mixtures  of  both;  women's  stuff  and 
fsilk  shoes. 

IX.  Refined  sugars. 

X.  Oils  of  animals  and  seeds,  soap,  spermaceti  and  tallow  candles. 

XI.  Copper  and  brass  wires,  particularly  utensils  for  distillers,  sugar  re- 
finers, and  brewers;  andirons  and  other  articles  for  household  use,  philo- 
sophical apparatus. 

XII.  Tin  wares  for  most  purposes  of  ordinary  use, 
XTI.   Carriages  of  all  kinds. 

XIV.  Snuff,  chewing,  and  smoking  tobacco. 

XV.  Starch  and  hair-powder. 

XVI.  Lampblack  and  other  painters'  colors. 

XVII.  Gunpowder. 

Besides  manufactories  of  these  articles,  which  are  carried  on  as  regular 
trades,  and  have  attained  to  a  considerable  degree  of  maturity,  there  is  a 
vast  scene  of  household  manufacturing,  which  contributes  more  largely  to 
the  supply  of  the  community  than  could  be  imagined,  without  having  made 
it  an  object  of  particular  inquiry.  This  observation  is  the  pleasing  result  of 
the  investigation  to  which  the  subject  of  this  report  has  led,  and  is  applica- 
ble as  well  to  the  southern  as  to  the  middle  and  northern  States.     Great, 


1701.]  SECRETARY  OF  THE  TREASURY.  103 

quantities  of  coarse  cloths,  coatings,  serges,  and  flannels,  linsey  woolseys, 
hosiery  of  wool,  cotton  and  thread,  coarse  fustians,  jeans  and  muslins,  checked 
and  striped  cotton  and  linen  goods,  bed  ticks,  coverlets  and  counterpanes* 
tow  linens,  coarse  shirtings,  sheetings,  towelling  and  table  linen,  and  vari- 
ous mixtures  of  wool  and  cotton,  and  of  cotton  and  flax,  are  made  in  the 
household  way,  and,  in  many  instances,  to  an  extent  not  only  sufficient  for 
the  supply  of  the  families  in  which  they  are  made,  but  for  sale,  and  even,  in 
some  cases,  for  exportation.  It  is  computed  in  a  number  of  districts  that 
two-thirds,  three-fourths,  and  even  four-fifths,  of  all  the  clothing  of  the  in- 
habitants are  made  by  themselves.  The  importance  of  so  great  a  progress  as 
appears  to  have  been  made  in  family  manufactures  within  a  few  years,  both 
in  a  moral  and  political  view,  renders  the  fact  highly  interesting. 

Neither  does  the  above  enumeration  comprehend  all  the  articles  that  are 
manufactured  as  regular  trades.  Many  others  occur  which  are  equally  well 
established,  but  which,  not  being  of  equal  importance,  have  been  omitted. 
And  there  are  many  attempts  still  in  their  infancy,  which,  though  attended 
with  very  favorable  appearances,  could  not  have  been  properly  comprised  in 
an  enumeration  of  manufactories  already  established.  There  are  other  ar- 
ticles, also,  of  great  importance,  which,  though  strictly  speaking,  manufac- 
tures, are  omitted*  as  being  immediately  connected  with  husbandry:  such  are 
flour,  pot  and  pearl  ash,  pitch,  tar,  turpentine,  and  the  like. 

There  remains  to  be  noticed  an  objection  to  the  encouragement  of  manu- 
factures, of  a  nature  different  from  those  which  question  the  probability  of 
success.  This  is  derived  from  its  supposed  tendency  to  give  a  monopoly  of 
advantages  to  particular  classes,  at  the  expense  of  the  rest  of  the  community, 
who,  it  is  affirmed,  would  be  able  to  procure  the  requisite  supplies  of  manu- 
factured articles  on  better  terms  from  foreigners  than  from  our  own  citizens; 
and  who,  it  is  alleged,  are  reduced  to  the  necessity  of  paying  an  enhanced 
price  for  whatever  they  want,  by  every  measure  which  obstructs  the  free 
competition  of  foreign  commodities. 

It  is  not  an  unreasonable  supposition,  that  measures  which  serve  to  abridge 
the  free  competition  of  foreign  articles  have  a  tendency  to  occasion  an  en- 
hancement of  prices;  and  it  is  not  to  be  denied  that  such  is  the  effect  in  a 
number  of  cases;  but  the  fact  does  not  uniformly  correspond  with  the  theory. 
A  reduction  of  prices  has,  in  several  instances,  immediately  succeeded  the 
establishment  of  a  domestic  manufacture.  Whether  it  be  that  foreign  manu- 
facturers endeavor  to  supplant,  by  underselling  our  own,  or  whatever  else 
be  the  cause,  the  effect  has  been  such  as  is  stated,  and  the  reverse  of  what 
might  have  been  expected. 

But,  though  it  were  true  that  the  immediate  and  certain  effect  of  regula- 
tions controlling  the  competition  of  foreign  with  domestic  fabrics,  was  an  in- 
crease of  price,  it  is  universally  true  that  the  contrary  is  the  ultimate  effect 
with  every  successful  manufacture.  When  a  domestic  manufacture  has  atr 
tained  to  perfection,  and  has  engaged  in  the  prosecution  of  it  a  competent 
number  of  persons,  it  invariably  becomes  cheaper.  Being  free  from  the 
heavy  charges  which  attend  the  importation  of  foreign  commodities,  it  can 
be  afforded,  and  accordingly  seldom  or  never  fails  to  be  sold  cheaper,  in 
process  of  time,  than  was  the  foreign  article  for  which  it  is  a  substitute.  The 
internal  competition  which  takes  place,  soon  does  away  every  thing  like 
monopoly,  and  by  degrees  reduces  the  price  of  the  article  to  the  minimum 
of  a  reasonable  profit  on  the  capital  employed.  This  accords  with  the  rea- 
son of  the  thing,  and  with  experience. 


104  REPORTS  OF  THE  [1791. 

Whence  it  follows,  that  it  is  the  interest  of  a  community,  with  a  view  to 
eventual  and  permanent  economy,  to  encourage  the  growth  of  manufactures. 
In  a  national  view,  a  temporary  enhancement  of  price  must  always  be  well 
compensated  by- a  permanent  reduction  of  it. 

It  is  a  reflection  which  may  with  propriety  be  indulged  here,  that  this 
eventual  diminution  of  the  prices  of  manufactured  articles  which  is  the 
result  of  internal  manufacturing  establishments,  has  a  direct  and  very  im- 
portant tendency  to  benefit  agriculture.  It  enables  the  farmer  to  procure, 
with  a  smaller  quantity  of  his  labor,  the  manufactured  produce  of  which 
he  stands  in  need,  and  consequently  increases  the  value  of  his  income  and 
property. 

The  objections  which  are  commonly  made  to  the  expediency  of  encou- 
raging, and  to  the  probability  of  succeeding  in  manufacturing  pursuits  in 
the  United  States,  having  now  been  discussed,  the  considerations  which 
have  appeared  in  the  course  of  the  discussion,  recommending  that  species  of 
industry  to  the  patronage  of  the  government,  will  be  materially  strengthened 
by  a  few  general,  and  some  particular  topics,  which  have  been  naturally  re- 
served for  subsequent  notice. 

1.  There  seems  to  be  a  moral  certainty,  that  the  trade  of  a  country  which 
is  both  manufacturing  and  agricultural,  will  be  more  lucrative  and  prosper- 
ous than  that  of  a  country  which  is  merely  agricultural. 

One  reason  for  this  is  found  in  that  general  effort  of  nations,  (which  has 
been  already  mentioned,)  to  procure  from  their  own  soils,  the  articles  of  prime 
necessity  requisite  to  their  own  consumption  and  use,  and  which  serves  to 
render  their  demand  for  a  foreign  supply  of  such  articles,  in  a  great  degree, 
occasional  and  contingent.  Hence,  while  the  necessities  of  nations  exclu- 
sively devoted  to  agriculture,  for  the  fabrics  of  manufacturing  States,  are 
constant  and  regular,  the  wants  of  the  latter  for  the  products  of  the  former, 
are  liable  to  very  considerable  fluctuations  and  interruptions.  The  great 
inequalities  resulting  from  difference  of  seasons,  have  been  elsewhere  re- 
marked. This  uniformity  of  demand  on  one  side,  and  unsteadiness  of  it  on  the 
other,  must  necessarily  have  a  tendency  to  cause  the  general  course  of  the 
exchange  of  commodities  between  the  parties,  to  turn  to  the  disadvantage  of 
the  merely  agricultural  States.  Peculiarity  of  situation,  a  climate  and  soil 
adapted  to  the  production  of  peculiar  commodities,  may  sometimes  contra- 
dict the  rule;  but  there  is  every  reason  to  believe  that  it  will  be  found,  in 
the  main,  a  just  one. 

Another  circumstance  which  gives  a  superiority  of  commercial  advantages 
to  States  that  manufacture  as  well  as  cultivate,  consists  in  the  more  numer- 
ous attractions  which  a  more  diversified  market  offers  to  foreign  customers, 
and  in  the  greater  scope  which  it  affords  to  mercantile  enterprise.  It  is  a 
position  of  indisputable  truth,  in  commerce,  depending  too  on  very  obvious 
reasons,  that  the  greatest  resort  will  ever  be  to  those  marts  where  commo- 
dities, while  equally  abundant,  are  most  various.  Each  difference  of  kind 
holds  out  an  additional  inducement:  and  it  is  a  position  not  less  clear,  that 
the  field  of  enterprise  must  be  enlarged  to  the  merchants  of  a  country,  in 
proportion  to  the  variety,  as  well  as  the  abundance  of  commodities  which 
they  find  at  home,  for  exportation  to  foreign  markets. 

A  third  circumstance,  perhaps  not  inferior  to  either  of  the  other  two, 
conferring  the  superiority  which  has  been  stated,  has  relation  to  the  stagna- 
tions of  demand  for  certain  commodities,  which,  at  some  time  or  other,  in- 
terfere more  or  less  with  the  sale  of  all.  The  nation  which  can  bring  to 
market  but  few  articles,  is  likely  to  be  more  quickly  and  sensibly  affected 


1791.]  SECRETARY  OF  THE  TREASURY.  10^ 

hy  such  stagnations,  than  one  which  is  always  possessed  of  a  great  variety  of 
commodities;  the  former  frequently  finds  too  great  a  portion  of  its  stock  of 
materials  for  sale  or  exchange,  lying  on  hand,  or  is  obliged  to  make  injurious 
sacrifices  to  supply  its  wants  of  foreign  articles,  which  are  numerous  and 
urgent,  in  proportion  to  the  smallness  of  the  number  of  its  own.  The  lat- 
ter commonly  finds  itself  indemnified  by  the  high  prices  of  some  articles? 
for  the  low  prices  of  others;  and  the  prompt  and  advantageous  sale  of  those 
articles  which  are  in  demand,  enables  its  merchants  the  better  to  wait  for  a 
favorable  change  in  respect  to  those  which  are  not.  There  is  ground  to  be- 
lieve that  a  difference  of  situation  in  this  particular,  has  immensely  different 
effects  upon  the  wealth  and  prosperity  of  nations. 

From  these  circumstances,  collectively,  two  important  inferences  are  to  be 
drawn:  one,  that  there  is  always  a  higher  probability  of  a  favorable  balance 
of  trade,  in  regard  to  countries  in  which  manufactures  founded  on  the  basis 
of  a  thriving  agriculture  flourish,  than  in  regard  to  those  which  are  confined 
wholly,  or  almost  wholly  to  agriculture;  the  other,  (which  is  also  a  conse- 
quence of  the  first,)  that  countries  of  the  former  description  are  likely  to  pos- 
sess more  pecuniary  wealth,  or  money,  than  those  of  the  latter. 

Facts  appear  to  correspond  with  this  conclusion.  The  importations  of 
manufactured  supplies,  seem  invariably  to  drain  the  merely  agricultural 
people  of  their  wealth.  Let  the  situation  of  the  manufacturing  countries  of 
Europe  be  compared,  in  this  particular,  with  that  of  countries  which  only 
cultivate,  and  the  disparity  will  be  striking.  Other  causes,  it  is  true,  help 
to  account  for  this  disparity  between  some  of  them;  and  among  these  causes, 
the  relative  state  of  agriculture;  but  between  others  of  them,  the  most  prominent 
circumstance  of  dissimilitude  arises  from  the  comparative  state  of  manufac- 
tures. In  corroboration  of  the  same  idea,  it  ought  not  to  escape  remark, 
that  the  West  India  Islands,  the  soils  of  which  are  the  most  fertile,  and  the 
nation  which,  in  the  greatest  degree  supplies  the  rest  of  the  world  with  the 
precious  metals,  exchange  to  a  loss  with  almost  every  other  country. 

As  far  as  experience  at  home  may  guide,  it  will  lead  to  the  same  conclu- 
sion. Previous  to  the  revolution,  the  quantity  of  coin  possessed  by  the 
colonies  which  now  compose  the  United  States,  appeared  to  be  inadequate 
to  their  circulation;  and  their  debt  to  Great  Britain  was  progressive.  Since 
the  revolution,  the  States  in  which  manufactures  have  most  increased,  have 
recovered  fastest  from  the  injuries  of  the  late  war,  and  abound  most  in  pe- 
cuniary resources. 

It  ought  to  be  admitted,  however,  in  this,  as  in  the  preceding  case,  that 
causes  irrelative  to  the  state  of  manufactures,  account,  in  a  degree,  for 
the  phenomena  remarked.  The  continual  progress  of  new  settlements  has 
a  natural  tendency  to  occasion  an  unfavorable  balance  of  trade;  though  it. 
indemnifies  for  the  inconvenience,  by  that  increase  of  the  national  capital, 
which  flows  from  the  conversion  of  waste  into  improved  lands:  and  the  dif- 
ferent degrees  of  external  commerce  which  are  carried  on  by  the  different 
States,  may  make  material  differences  in  the  comparative  state  of  their 
wealth.  The  first  circumstance  has  reference  to  the  deficiency  of  coin,  and 
the  increase  of  debt  previous  to  the  revolution;  the  last,  to  the  advantages 
which  the  most  manufacturing  States  appear  to  have  enjoyed  over  the  others, 
since  the  termination  of  the  late  war. 

But  the  uniform  appearance  of  an  abundance  of  specie,  as  the  concomitant 
of  a  flourishing  state  of  manufactures,  and  of  the  reverse,  where  they  do 
not  prevail,  afford  a  strong  presumption  of  their  favorable  operation  upon 
the  wealth  of  a  country. 


106  REPORTS  OF  THE  [I79L 

Not  only  the  wealth,  but  the  independence  and  security  of  a  country  ap- 
pear to  be  materially  connected  with  the  prosperity  of  manufactures.  Every 
nation,  with  a  view  to  those  great  objects,  ought  to  endeavor  to  possess 
within  itself  all  the  essentials  of  national  supply.  These  comprise  the 
means  of  subsistence,  habitation,  clothing,  and  defence. 

The  possession  of  these  is  necessary  to  the  perfection  of  the  body  poli- 
tic; to  the  safety  as  well  as  to  the  welfare  of  the  society;  the  want  of  either 
is  the  want  of  an  important  organ  of  political  life  and  motion;  and  in  the 
various  crises  which  await  a  State,  it  must  severely  feel  the  effects  of  any 
such  deficiency.  The  extreme  embarrassments  of  the  United  States,  during 
the  late  war,  from  an. incapacity  of  supplying  themselves,  are  still  matter  of 
keen  recollection;  a  future  war  might  be  expected  again  to  exemplify  the 
mischiefs  and  dangers  of  a  situation,  to  Which  that  incapacity  is  still,  in  too 
great  a  degreey-appiicable,  unless  changed  by  timely  and  vigorous  exertions. 
To  effect  this  change,  as  fast  as  shall  be  prudent,  merits  all  the  attention  and 
all  the  zeal  of  our  public  councils:  it  is  the  next  great  work  to  be  accom- 
plished. 

The  want  of  a  navy  to  protect  our  external  commerce,  as  long  as  it  shall, 
continue,  must  render  it  a  peculiarly  precarious  reliance  for  the  supply  of 
essential  articles,  and  must  serve  to  strengthen  prodigiously  the  arguments 
in  favor  of  manufactures. 

To  these  general  considerations  are  added  some  of  a  more  particular  na- 
ture. 

Our  distance  from  Europe,  the  great  fountain  of  manufactured  supply^ 
subjects  us,  in  the  existing  state  of  things,  to  inconvenience  and  loss,  in  two 
ways. 

The  bulkiness  of  those  commodities,  which  are  the  chief  productions  of 
the  soil,  necessarily  imposes  very  heavy  charges  on  their  transportation  to 
distant  markets.  These  charges,  in  the  cases  in  which  the  nations  to  whom 
our  products  are  sent,  maintain  a  competition  in  the  supply  of  their  own 
markets,  principally  fall  upon  us,  and  form  material  deductions  from  the 
primitive  value  of  the  articles  furnished.  The  charges  on  manufactured 
supplies,  brought  from  Europe,  are  greatly  enhanced  by  the  same  circum- 
stance of  distance.  These  charges,  again,  in  the  cases  in  which  our  own  indus- 
try maintains  no  competition  in  our  own  markets,  also  principally  fall  upon  usj 
and  are  an  additional  cause  of  extraordinary  deduction  from  the  primitive 
value  of  our  own  products;  these  being  the  materials  of  exchange  for  the 
foreign  fabrics  which  we  consume. 

The  equality  and  moderation  of  individual  property,  and  the  growing 
settlements  of  new  districts,  occasion  in  this  country  an  unusual  demand  for 
coarse  manufactures;  the  charges  of  which  being  greater  in  proportion  to 
their  greater  bulk,  augment  the  disadvantage  which  has  been  just  described. 

As  in  most  countries,  domestic  supplies  maintain  a  very  considerable 
competition  with  such  foreign  productions  of  the  soil  as  are  imported  for 
sale;  if  the  extensive  establishment  of  manufactories  in  the  United  States 
does  not  create  a  similar  competition  in  respect  to  manufactured  articles,  it 
appears  to  be  clearly  deducible  from  the  considerations  which  have  been 
mentioned,  that  they  must  sustain  a  double  loss  in  their  exchanges  with  fo- 
reign nations,  strongly  conducive  to  an  unfavorable  balance  of  trade,  and 
very  prejudicial  to  their  interests. 

These  disadvantages  press,  with  no  small  weight,  on  the  landed  interest 
x)f  the  country.     In  seasons  of  peace,  they  cause  a  serious  deduction  from 


791.] 


SECRETARY  OF  THE  TREASURY.  JQ7 


the  intrinsic  value  of  the  products  of  the  soil.  In  the  time  of  a  war,  which 
should  either  involve  ourselves,  or  another  nation  possessing  a  considerable 
share  of  our  carrying  trade,  the  charges  on  the  transportation  of  our  com- 
modities, bulky  as  most  of  them  are,  could  hardly  fail  to  prove  a  grievous 
burthen  to  the  farmer,  while  obliged  to  depend,  in  so  great  a  degree  as  he 
now  does,  upon   foreign  markets,  for  the  vent  of  the  surplus  of  his  labor. 

As  far  as  the  prosperity  of  the  fisheries  of  the  United  States  is  impeded 
by  the  want  of  an  adequate  market,  there  arises  another  special  reason  for 
desiring  the  extension  of  manufactures.  Besides  the  fish,  which  in  many 
places  would  be  likely  to  make  a  part  of  the  subsistence  of  the  persons  em- 
ployed; it  is  knoAvn  that  the  oils,  bones,  and  skins  of  marine  animals,  are 
of  extensive  use  in  various  manufactures.  Hence  the  prospect  of  an  addi- 
tional demand  for  the  produce  of  the  fisheries. 

One  more  point  of  view  only  remains,  in  which  to  consider  the  expediency 
of  encouraging  manufactures  in  the  United  States. 

It  is  not  uncommon  to  meet  with  an  opinion,  that,  though  the  promoting 
of  manufactures  may  be  the  interest  of  a  part  of  the  Union,  it  is  contrary 
to  that  of  another  part.  The  northern  and  southern  regions  are  sometimes 
represented  as  having  adverse  interests  in  this  respect.  Those  are  called 
manufacturing,  these  agricultural  States;  and  a  species  of  opposition  is  ima- 
gined to  subsist  between  the  manufacturing  and  agricultural  interests. 

This  idea  of  an  opposition  between  those  two  interests,  is  the  common 
error  of  the  early  periods  of  every  country;  but  experience  gradually  dis- 
sipates it.  Indeed,  they  are  perceived  so  often  to  succor  and  to  befriend 
each  other,  that  they  come  at  length  to  be  considered  as  one;  a  supposition 
which  has  been  frequently  abused,  and  is  not  universally  true.  Particular 
encouragements  of  particular  manufactures  may  be  of  a  nature  to  sacrifice 
the  interests  of  landholders  to  those  of  manufacturers  ;  but  it  is  neverthe- 
less a  maxim,  well  established  by  experience,  and  generally  acknowledged, 
where  there  has  been  sufficient  experience,  that  the  aggregate  prosperity  of 
manufactures,  and  the  aggregate  prosperity  of  agriculture,  are  intimately 
connected.  In  the  course  of  the  discussion  which  has  had  place,  various 
weighty  considerations  have  been  adduced,  operating  in  support  of  that 
maxim.  Perhaps  the  superior  steadiness  of  the  demand  of  a  domestic  mar- 
ket, for  the  surplus  produce  of  the  soil,  is,  alone,  a  convincing  argument  of 
its  truth. 

Ideas  of  a  contrariety  of  interests  between  the  Northern  and  Southern  re- 
gions of  the  Union,  are,  in  the  main,  as  unfounded  as  they  are  mischievous. 
The  diversity  of  circumstances  on  which  such  contrariety  is  usually  predi- 
cated, authorizes  a  directly  contrary  conclusion.  Mutual  wants  constitute 
one  of  the  strongest  links  of  political  connexion;  and  the  extent  of  these 
bears  a  natural  proportion  to  the  diversity  in  the  means  of  mutual  supply. 

Suggestions  of  an  opposite  complexion  are  ever  to  be  deplored,  as  un- 
friendly to  the  steady  pursuit  of  one  great  common  cause,  and  to  the  per- 
fect harmony  of  all  the  parts. 

In  proportion  as  the  mind  is  accustomed  to  trace  the  intimate  connexion 
of  interest  which  subsists  between  all  the  parts  of  a  society  united  un- 
der the  same  government;  the  infinite  variety  of  channels  will  serve  to 
circulate  the  prosperity  of  each,  to  and  through  the  rest,  in  that  proportion 
will  it  be  little  apt  to  be  disturbed  by  solicitudes  and  apprehensions,  which 
originate  in  local  discriminations. 

It:  is  a  truth,  as  important  as  it  is  agreeable,  and  one  to  which  it  is  not 
15 


108  REPORTS  OF  THE  [1791. 

easy  to  imagine  exceptions,  that  every  thing  tending  to  establish  substantial 
and  permanent  order  in  the  affairs  of  a  country,  to  increase  the  total  mass 
of  industry  and  opulence,  is  ultimately  beneficial  to  every  part  of  it.  On 
the  credit  of  this  great  truth,  an  acquiescence  may  safely  be  accorded,  from 
every  quarter,  to  all  institutions  and  arrangements  which  promise  a  confir- 
mation of  public  order  and  an  augmentation  of  national  resource. 

But  there  are  more  particular  considerations,  which  serve  to  fortify  the 
idea,  that  the  encouragement  of  manufactures  is  the  interest  of  all  parts  of 
the  Union.  If  the  northern  and  middle  States  should  be  the  principal 
scenes  of  such  establishments,  they  would  immediately  benefit  the  more 
southern,  by  creating  a  demand  for  productions,  some  of  which  they  have 
in  common  with  the  other  States,  and  others  of  which  are  either  peculiar  to 
them,  or  more  abundant,  or  of  better  quality,  than  elsewhere.  These  pro- 
ductions, principally,  are  timber,  flax,  hemp,  cotton,  wool,  raw  silk,  indigo, 
iron,  lead,  furs,  hides,  skins  and  coals:  of  these  articles  cotton  and  indigo 
are  peculiar  to  the  Southern  States;  as  are,  hitherto,  lead  and  coal:  flax  and 
hemp  are,  or  may  be  raised  in  greater  abundance  there,  than  in  the  more 
Northern  States,  and  the  wool  of  Virginia  is  said  to  be  of  better  quality 
than  that  of  any  other  State;  a  circumstance  rendered  the  more  probable,  by 
the  reflection,  that  Virginia  embraces  the  same  latitudes  with  the  finest  wool 
countries  of  Europe.  The  climate  of  the  south  is  also  better  adapted  to  the 
production  of  silk. 

The  extensive  cultivation  of  cotton  can,  perhaps,  hardly  be  expected,  but 
from  the  previous  establishment  of  domestic  manufactories  of  the  article; 
and  the  surest  encouragement  and  vent  for  the  others,  would  result  from 
similar  establishments  in  respect  to  them. 

If,  then,  it  satisfactorily  appears,  that  it  is  the  interest  of  the  United 
States,  generally,  to  encourage  manufactures,  it  merits  particular  attention, 
that  there  are  circumstances  which  render  the  present  a  critical  moment  for 
entering,  with  zeal,  upon  the  important  business.  The  effort  cannot  fail  to 
be  materially  seconded  by  a  considerable  and  increasing  influx  of  money, 
in  consequence  of  foreign  speculations  in  the  funds,  and  by  the  disorders 
which  exist  in  different  parts  of  Europe. 

The  first  circumstance  not  only  facilitates  the  execution  of  manufacturing 
enterprises,  hut  it  indicates  them  as  a  necessary  mean  to  turn  the  thing  itself 
to  advantage,  and  to  prevent  its  being  eventually  an  evil.  If  useful  employ- 
ment be  not  found  for  the  money  of  foreigners,  brought  to  the  country  to 
be  invested  in  purchases  of  the  public  debt,  it  will  quickly  be  re-export- 
ed to  defray  the  expense  of  an  extraordinary  consumption  of  foreign  luxu- 
ries; and  distressing  drains  of  our  specie  may  hereafter  be  experienced,  to 
pay  the  interest  and  redeem  the  principal  of  the  purchased  debt. 

This  useful  employment,  too,  ought  to  be  of  a  nature  to  produce  solid 
and  permanent  improvements.  If  the  money  merely  serves  to  give  a 
temporary  spring  to  foreign  commerce;  as  it  cannot  procure  new  and  lasting 
outlets  for  the  products  of  the  country,  there  will  be  no  real  or  durable  ad- 
vantage gained.  As  far  as  it  shall  find  its  way  in  agricultural  meliorations, 
in  opening  canals,  and  in  similar  improvements,  it  will  be  productive  of  sub- 
stantial utility.  But  there  is  reason  to  doubt,  whether,  in  such  channels,  it 
is  likely  to  find  sufficient  employment;  and  still  more,  whether  many  of 
those  who  possess  it,  would  be  as  readily  attracted  to  objects  of  this  nature, 
as  to  manufacturing  pursuits,  which  bear  greater  analogy  to  those  to  which 
they  are  accustomed,  and  to  the  spirit  generated  by  them. 


1791.]  SECRETARY  OF  THE  TREASURY.  10f) 

To  open  the  one  field,  as  well  as  the  other,  will  at  least  secure  a  better 
prospect  of  useful  employment,  for  whatever  accession  of  money  there  has 
been  or  may  be. 

There  is,  at  the  present  juncture,  a  certain  fermentation  of  mind,  a  cer- 
tain activity  of  speculation  and  enterprise,  which,  if  properly  directed,  may 
be  made  subservient  to  useful  purposes;  but  which,  if"  left  entirely  to  itself, 
may  be  attended  with  pernicious  effects. 

The  disturbed  state  of  Europe,  inclining  its  citizens  to  emigration,  the 
requisite  workmen  will  be  more  easily  acquired  than  at  another  time,  and 
the  effect  of  multiplying  the  opportunities  of  employment  to  those  who 
emigrate,  may  be  an  increase  of  the  number  and  extent  of  valuable  acquisi- 
tions to  the  population,  arts,  and  industry  of  the  country. 

To  find  pleasure  in  the  calamities  of  other  nations  would  be  criminal;  but 
to  benefit  ourselves,  by  opening  an  asylum  to  those  who  suffer  in  conse- 
quence of  them,  is  as  justifiable  as  it  is  politic. 

A  full  view  having  now  been  taken  of  the  inducements  to  the  promotion  of 
manufactures  in  the  United  States,  accompanied  with  an  examination  of  the 
principal  objections  which  are  commonly  urged  in  opposition,  it  is  proper, 
in  the  next  place,  to  consider  the  means  by  which  it  may  be  effected,  as  in- 
troductory to  a  specification  of  the  objects  which,  in  the  present  state  of 
things,  appear  the  most  fit  to  be  encouraged,  and  of  the  particular  measures, 
which  it  may  be  adviseable  to  adopt,  in  respect  to  each. 

In  order  to  a  better  judgment  of  the  means  proper  to  be  resorted  toby  the 
United  States,  it  will  be  of  use  to  advert  to  those  which  have  been  employed 
with  success  in  other  countries — The  principal  of  these  are: 

/.  Protecting  duties — or  duties  on  those  foreign  articles  which  are 
the  rivals  of  the  domestic  ones  intended  to  be  encouraged. 

Duties  of  this  nature  evidently  amount  to  a  virtual  bounty  on  the  domes- 
tic fabrics;  since,  by  enhancing  the  charges  on  foreign  articles,  they  enable 
the  national  manufacturers  to  undersell  all  their  foreign  competitors.  The 
propriety  of  this  species  of  encouragement  need  not  be  dwelt  upon;  as  it  is 
not  only  a  clear  result  from  the  numerous  topics  which  have  been  suggested, 
but  is  sanctioned  by  the  laws  of  the  United  States,  in  a  variety  of  instances; 
it  has  the  additional  recommendation  of  being  a  resource  of  revenue.  In- 
deed all  the  duties  imposed  on  imported  articles,  though  with  an  exclusive 
view  to  revenue,  have  the  effect  in  contemplation,  and,  except  where  they 
fall  on  raw  materials,  wear  a  beneficent  aspect  towards  the  manufacturers  of 
the  country. 

II.  Prohibitions  of  rival  articles,  or  duties  equivalent  to  prohibitio?is. 

This  is  another  and  an  efficacious  mean  of  encouraging  national  manufac- 
tures; but,  in  general,  it  is  only  fit  to  be  employed  when  a  manufacture  has 
made  such  a  progress,  and  is  in  so  many  hands,  as  to  ensure  a  due  competi- 
tion, and  an  adequate  supply  on  reasonable  terms.  Of  duties  equivalent  to 
prohibitions,  there  are  examples  in  the  laws  of  the  United  States;  and  there 
are  other  cases,  to  which  the  principle  may  be  advantageously  extended, 
but  they  are  not  numerous. 

Considering  a  monopoly  of  the  domestic  market  to  its  own  manufacturers 
as  the  reigning  policy  of  manufacturing  nations,  a  similar  policy  on  the  part, 
of  the  United  States,  in  every  proper  instance,  is  dictated,  it  might  almost  be 
said,  by  the  principles  of  distributive  justice;  certainly  by  the  duty  of 
endeavoring  to  secure  to  their  own  citizens  a  reciprocity  of  advantages. 


IjQ  REPORTS  OF  THE  [1791. 

III.  Prohibitions  of  the  exportation  of  the  materials  of  manufac- 
tures. . 

The  desire  of  securing  a  cheap  and  plentiful  supply  for  the  national 
workmen,  ~nd  where  the  article  is  either  peculiar  to  the  country,  or  of  pecu- 
liar quality  there,  the  jealousy  of  enabling  foreign  workmen  to  rival  those 
of  the  nation  with  its  own  materials,  are  the  leading  motives  to  this  species 
of  regulation.  It  ought  not  to  be  affirmed,  that  it  is  in  no  instance  proper: 
but  it  is  certainly  one  which  ought  to  be  adopted  with  great  circumspection, 
and  only  in  very  plain  cases.  It  is  seen  at  once,  that  its  immediate  operation 
is  to  abridge  the  demand,  and  keep  down  the  price  of  the  produce  of  some 
other  branch  of  industry,  generally  speaking,  of  agriculture,  to  the  preju- 
dice of  those  who  carry  it  on;  and  though,  if  it  be  really  essential  to  the 
prosperity  of  any  very  important  national  manufacture,  it  may  happen,  that 
those  who  are -injured  in  the  first  instance,  may  be  eventually  indemnified 
by  the  superior  steadiness  of  an  extensive  domestic  market,  depending  on 
that  prosperity;  yet,  in  a  matter  in  which  there  is  so  much  room  for  nice 
and  difficult  combinations,  in  which  such  opposite  considerations  combat 
each  other,  prudence  seems  to  dictate  that  the  expedient  in  question  ought 
to  be  indulged  with  a  sparing  hand. 

IV.  Pecuniary  bounties. 

This  has  been  found  one  of  the  most  efficacious  means  of  encouraging  ma- 
nufactures, and  it  is,  in  some  views,  the  best.  Though  it  has  not  yet  been 
practised  upon  by  the  government  of  the  United  States,  (unless  the  allow- 
ance on  the  exportation  of  dried  and  pickled  fish  and  salted  meat  could  be 
considered  as  a  bounty,)  and  though  it  is  less  favored  by  public  opinion  than 
some  other  modes,  its  advantages  are  these: 

1.  It  is  a  species  of  encouragement  more  positive  and  direct  than  any 
other,  and,  for  that  very  reason,  has  a  more  immediate  tendency  to  stimu- 
late and  uphold  new  enterprises,  increasing  the  chances  of  profit,  and  di- 
minishing the  risks  of  loss  in  the  first  attempts. 

2.  It  avoids  the  inconvenience  of  a  temporary  augmentation  of  price, 
which  is  incident  to  some  other  modes;  or  it  produces  it  to  a  less  degree; 
either  by  making  no  addition  to  the  charges  on  the  rival  foreign  article,  as  in 
the  case  of  protecting  duties,  or  by  making  a  smaller  addition.  The  first 
happens  when  the  fund  for  the  bounty  is  derived  from  a-  different  object, 
(which  may  or  may  not  increase  the  price  of  some  other  article,  according 
to  the  nature  of  that  object);  the  second,  when  the  fund  is  derived  from  the 
same,  or  a  similar  object  of  foreign  manufacture.  One  per  cent,  duty  on 
the  foreign,  article,  converted  into  a  bounty  on  the  domestic,  will  have  an 
equal  effect  with  a  duty  of  two  per  cent,  exclusive  of  such  bounty;  and  the 
price  of  the  foreign  commodity  is  liable  to  be  raised,  in  the  one  case,  in  the 
proportion  of  one  per  cent.,  in  the  other  in  that  of  two  per  cent.  Indeed 
the  bounty,  when  drawn  from  another  source,  is  calculated  to  promote  a  re- 
duction of  price;  because,  without  laying  any  new  charge  on  the  foreign  ar- 
ticle, it  serves  to  introduce  a  competition  with  it,  and  to  increase  the  total 
quantity  of  the  article  in  the  market. 

3.  Bounties  have  not,  like  high  protecting  duties,  a  tendency  to  produce 
scarcity.  An  increase  of  price  is  not  always  the  immediate,  though,  where 
the  progress  of  a  domestic  manufacture  does  not  counteract  a  rise,  it  is  com- 
monly the  ultimate  effect  of  an  additional  duty.  In  the  interval  between  the 
laying  of  the  duty  and  the  proportional  increase  of  price,  it  may  discourage 


1 79 1 .]      SECRETARY  OF  THE  TREASURY.         m 

importation,  by  interfering  with  the  profits  to  be  expected  from  the  sale  of 
the  article. 

4.  Bounties  are  sometimes  not  onty  the  best,  but  the  only  proper  expedi- 
ent for  uniting  the  encouragement  of  a  new  object  of  agriculture  with  that 
of  a  new  object  of  manufacture.  It  is  the  interest  of  the  farmer  to  have  the 
production  of  the  raw  material  promoted  by  counteracting  the  interference  of 
the  foreign  material  of  the  same  kind.  It  is  the  interest  of  the  manufacturer 
to  have  the  material  abundant  and  cheap.  If,  prior  to  the  domestic  pro- 
duction of  the  material  in  sufficient  quantity  to  supply  the  manufac- 
turer on  good  terms,  a  duty  be  laid  upon  the  importation  of  it  from  abroad, 
with  a  view  to  promote  the  raising  of  it  at  home,  the  interest  both  of  the 
farmer  and  manufacturer  will  be  disserved.  By  either  destroying  the  requi- 
site supply,  or  raising  the  price  of  the  article  beyond  what  can  be  afforded 
to  be  given  for  it  by  the  conductor  of  an  infant  manufacture,  it  is  abandoned 
or  fails,  and  there  being  no  domestic  manufactories  to  create  a  demand  for 
the  raw  material  which  is  raised  by  the  farmer,  it  is  in  vain  that  the  compe- 
tition of  the  like  foreign  article  may  have  been  destroyed. 

It  cannot  escape  notice  that  a  duty  upon  the  importation  of  an  article 
can  no  otherwise  aid  the  domestic  production  of  it,  than  by  giving  the  latter 
greater  advantages  in  the  home  market.  It  can  have  no  influence  upon  the 
advantageous  sale  of  the  article  produced  in  foreign  markets;  no  tendency, 
therefore,  to  promote  its  exportation. 

The  true  way  to  conciliate  these  two  interests  is  to  lay  a  duty  on  for- 
eign manufactures  of  the  material,  the  growth  of  which  is  desired  to  be 
encouraged,  and  to  apply  the  produce  of  that  duty,  by  way  of  bounty, 
either  upon  the  production  of  the  material  itself,  or  upon  its  manufacture  at 
home;  or  upon  both.  In  this  disposition  of  the  thing,  the  manufacturer 
commences  his  enterprise,  under  every  advantage  which  is  attainable,  as  to 
quantity  or  price  of  the  raw  material;  and  the  farmer,  if  the  bounty  be  im- 
mediately to  him,  is  enabled  by  it  to  enter  into  a  successful  competition  with 
the  foreign  material.  If  the  bounty  be  to  the  manufacturer  on  so  much  of  the 
domestic  material  as  he  consumes,  the  operation  is  nearly  the  same:  he  has 
a  motive  of  interest  to  prefer  the  domestic  commodity,  if  of  equal  quality, 
even  at  a  higher  price  than  the  foreign,  so  long  as  the  difference  of  price  is 
any  thing  short  of  the  bounty  which  is  allowed  upon  the  article. 

Except  the  simple  and  ordinary  kinds  of  household  manufacture,  or  those 
for  which  there  are  very  commanding  local  advantages,  pecuniary  bounties 
are,  in  most  cases,  indispensable  to  the  introduction  of  a  new  branch.  A 
stimulus  and  a  support  not  less  powerful  and  direct,  is,  generally  speaking, 
essential  to  the  overcoming  of  the  obstacles  which  arise  from  the  competitions 
of  superior  skill  and  maturity  elsewhere.  Bounties  are  especially  essential 
in  regard  to  articles  upon  which  those  foreigners  who  have  been  accustomed 
to  supply  a  country,  are  in  the  practice  of  granting  them. 

The  continuance  of  bounties  on  manufactures  long  established,  must  al- 
most always  be  of  questionable  policy:  because  a  presumption  would  arise  in 
every  such  case,  that  there  were  natural  and  inherent  impediments  to  success. 
But,  in  new  undertakings,  they  are  as  justifiable  as  they  are  oftentimes  ne- 
cessary. 

There  is  a  degree  of  prejudice  against  bounties,  from  an  appearance  of  giv- 
ing away  the  public  money  without  an  immediate  consideration,  and  from 
a  supposition  that  they  serve  to  enrich  particular  classes  at  the  expense  of 
t-he  community. 


112  REPORTS  OF  THE  [1791. 

But  neither  of  these  sources  of  dislike  will  bear  a  serious  examination. 
There  is  no  purpose  to  which  public  money  can  be  more  beneficially  applied 
than  to  the  acquisition  of  a  new  and  useful  branch  of  industry;  no  considera- 
tion more  valuable  than  a  permanent  addition  to  the  general  stock  of  pro- 
ductive labor. 

As  to  the  second  source  of  objection,  it  equally  lies  against  other  modes 
of  encouragement  which  are  admitted  to  be  eligible.  As  often  as  a  duty 
upon  a  foreign  article  makes  an  addition  to  its  price,  it  causes  an  extra  ex- 
pense to  the  community  for  the  benefit  of  the  domestic  manufacturer.  A 
bounty  does  no  more.  But  it  is  the  interest  of  the  society,  in  each  case,  to 
submit  to  a  temporary  expense,  which  is  more  than  compensated  by  an  in- 
crease of  industry  and  wealth,  by  an  augmentation  of  resources  and  indepen- 
dence, and  by  the  circumstance  of  eventual  cheapness,  which  has  been  no- 
ticed in  another-  place. 

It  would  deserve  attention,  however,  in  the  employment  of  this  species  of 
encouragement  in  the  United  States,  as  a  reason  for  moderating  the  degree  of 
it  in  the  instances  in  which  it  might  be  deemed  eligible,  that  the  great  dis- 
tance of  this  country  from  Europe,  imposes  very  heavy  charges  on  all  the 
fabrics  which  are  brought  from  thence,  amounting  from  fifteen  to  thirty  per 
cent,  on  their  value,  according  to  their  bulk. 

A  question  has  been  made  concerning  the  Constitutional  right  of  the  go- 
vernment of  the  United  States  to  apply  this  species  of  encouragement,  but 
there  is  certainly  no  good  foundation  for  such  a  question.  The  national 
legislature  has  express  authority  "to  lay  and  collect  taxes,  duties,  imposts 
and  excises,  to  pay  the  debts,  and  provide  for  the  common  defence  and  gen- 
eral welfare,"  with  no  other  qualifications  than  that  *'  all  duties,  imposts, 
and  excises,  shall  be  uniform  throughout  the  United  States,  that  no  capitation 
or  other  direct  tax  shall  be  laid,  unless  in  proportion  to  numbers  ascertained  by 
a  census  or  enumeration  taken  on  the  principles  prescribed  in  the  constitu- 
tion," and  that  "no  tax  or  duty  shall  be  laid  on  articles  exported  from  any 
State." 

These  three  qualifications  excepted,  the  power  to  raise  money  is  plenary 
and  indefinite;  and  the  objects  to  which  it  may  be  appropriated,  are  no  less 
comprehensive  than  the  payment  of  the  public  debts,  and  the  providing  for 
the  common  defence  and  general  welfare.  The  terms  "general  welfare," 
were  doubtless  intended  to  signify  more  than  was  expressed  or  imported  in 
those  which  preceded;  otherwise  numerous  exigencies  incident  to  the  affairs 
of  a  nation  would  have  been  left  without  a  provision.  The  phrase  is  as  com- 
prehensive as  any  that  could  have  been  used;  because  it  was  not  fit  that  the 
constitutional  authority  of  the  Union  to  appropriate  its  revenues,,  should  have 
been  restricted  within  narrower  limits  than  the  "  general  welfare;"  and  be- 
cause this  necessarily  embraces  a  vast  variety  of  particulars,  which  are  sus- 
ceptible neither  of  specification  nor  of  definition. 

It  is,  therefore,  of  necessity,  left  to  the  discretion  of  the  national  legislature, 
to  pronounce  upon  the  objects  which  concern  the  general  welfare,  and  for 
which,  under  that  description,  an  appropriation  of  money  is  requisite  and 
proper.  And  there  seems  to  be  no  room  for  a  doubt,  that  whatever  concerns 
the  general  interests  of  learning,  of  agriculture,  of  manufactures,  and  of  com- 
merce, are  within  the  sphere  of  the  national  councils,  as  far  as  regards  an  ap- 
plication of  money. 

The  only  qualification  of  the  generality  of  the  phrase  in  question,  which 
seems  to  be  admissible,  is  this:  That  the  object,  to  which  an  appropriation 
of  money  is  to  be  made,  be  general  and  not  local;  its  operation  extending,  iq 


1791.1  SECRETARY  OF  THE  TREASURY.  H3 

fact,  or  by  possibility,  throughout  the  Union,  and  not  being  confined  to  a 
particular  spot. 

No  objection  ought  to  arise  to  this  construction,  from  a  supposition  that 
it  would  imply  a  power  to  do  whatever  else  should  appear  to  Congress  con- 
ducive to  the  general  welfare.  A  power  to  appropriate  money  with  this  lati- 
tude, which  is  granted  too  in  express  terms,  would  not  carry  a  power  to  do 
any  other  thing  not  authorized  in  the  constitution,  either  expressly  or  by  fair 
implication. 

V.  Premiums. 

These  are  of  a  nature  allied  to  bounties,  though  distinguishable  from 
them  in  some  important  features. 

Bounties  are  applicable  to  the  whole  quantity  of  an  article  produced,  or 
manufactured,  or  exported,  and  involve  a  correspondent  expense.  Premi- 
ums serve  to  reward  some  particular  excellence  or  superiority,  some  extraor- 
dinary exertion  or  skill,  and  are  dispensed  only  in  a  small  number  of  cases. 
But  their  effect  is  to  stimulate  general  effort — contrived  so  as  to  be  both  hon- 
orary and  lucrative,  they  address  themselves  to  different  passions;  touching 
the  chords,  as  well  of  emulation  as  of  interest.  They  are,  accordingly,  a  very 
economical  mean  of  exciting  the  enterprise  of  a  whole  community. 

There  are  various  societies  in  different  countries,  whose  object  is  the  dis- 
pensation of  premiums  for  the  encouragement  of  agriculture,  arts,  manufac- 
tures, and  commerce;  and  though  they  are,  for  the  most  part,  voluntary  as- 
sociations, with  comparatively  slender  funds,  their  utility  has  been  immense, 
Much  has  been  done  by  this  mean  in  Great  Britain.  Scotland,  in  particular, 
owes  materially  to  it,  a  prodigious  melioration  of  condition.  From  a  sim- 
ilar establishment  in  the  United  States,  supplied  and  supported  by  the  govern- 
ment of  the.  Union,  vast  benefits  might  reasonably  be  expected.  Some  fur- 
ther ideas  on  this  head  shall  accordingly  be  submitted,  in  the  conclusion  of 
this  report. 

VI.  The  exemption  of  the  materials  of  manufactures  from  duty. 
The  policy  of  that  exemption,  as  a  general  rule,  particularly  in  reference 

to  new  establishments,  is  obvious.  It  can  hardly  ever  be  adviseable  to  add 
the  obstructions  of  fiscal  burthens  to  the  difficulties  which  naturally  embar- 
rass a  new  manufacture;  and  where  it  is  matured,  and  in  condition  to  become 
an  object  of  revenue,  it  is,  generally  speaking,  better  that  the  fabric  than  the 
material  should  be  the  subject  of  taxation.  Ideas  of  proportion  between  the 
quantum  of  the  tax  and  the  value  of  the  article,  can  be  more  easily  adjusted 
in  the  former  than  in  the  latter  case.  An  argument  for  exemptions  of  this 
kind,  in  the  United  States,  is  to  be  derived  from  the  practice,  as  far  as  their 
necessities  have  permitted,  of  those  nations  whom  we  are  to  meet  as  competi- 
tors in  our  own  and  in  foreign  markets. 

There  are,  however,  exceptions  to  it,  of  which  some  examples  will  be  given 
under  the  next  head. 

The  laws  of  the  Union  afford  instances  of  the  observance  of  the  policy  here 
recommended,  but  it  will  probably  be  found  adviseable  to  extend  it  to  some 
other  cases.  Of  a  nature,  bearing  some  affinity  to  that  policy,  is  the  regula- 
tion which  exempts  from  duty  the  tools  and  implements,  as  well  as  the 
books,  clothes,  and  household  furniture  of  foreign  artists,  who  come  to  reside 
in  the  United  States:  an  advantage  already  secured  to  them  by  the  laws  of  the 
Union,  and  which  it  is  in  every  view  proper  to  continue. 


1 1 4  REPORTS  OF  THE  [1791, 

VII.  Drawbacks  of  the  duties  which  are  imposed  on  the  materials  of 
manufactures. 

It  has  already  been  observed,  as  a  general  rule,  that  duties  on  those  mate- 
rials ought,  with  certain  exceptions,  to  be  forborne.  Of  these  exceptions? 
three  cases  occur,  which  may  serve  as  examples.  One,  where  the  material 
is  itself  an  object  of  general  or  extensive  consumption,  and  a  fit  and  produe-* 
tive  source  of  revenue.  Another,  where  a  manufacture  of  a  simpler  kind, 
the  competition  of  which  with  a  like  domestic  article  is  desired  to  be  restrain- 
ed, partakes  of  the  nature  of  a  raw  material,  from  being  capable,  by  a  far- 
ther process,  to  be  converted  into  a  manufacture  of  a  different  kind,  the  in- 
troduction or  growth  of  which  is  desired  to  be  encouraged.  A  third,  where 
the  material  itself  is  a  production  of  the  country,  and  in  sufficient  abundance 
to  furnish  a  cheap  and  plentiful  supply  to  the  national  manufacturers. 

Under  the  first  description  comes  the  article  of  molasses.  It  is  not  only  a 
fair  object  of  revenue,  but  beinga  sweet,  it  is  just  that  the  consumers  of  it 
should  pay  a  duty  as  well  as  the  consumers  of  sugar. 

Cottons  and  linen  in  their  white  state,  fall  under  the  second  description. 
A  duty  upon  such  as  are  imported  is  proper  to  promote  the  domestic  manu- 
facture of  similar  articles  in  the  same  state.  A  drawback  of  that  duty  is 
proper  to  encourage  the  printing  and  staining  at  home,  of  those  which  are 
brought  from  abroad.  When  the  first  of  these  manufactures  has  attained 
sufficient  maturity  in  a  country,  to  furnish  a  full  supply  for  the  second,  the 
utility  of  the  drawback  ceases. 

The  article  of  hemp  either  now  does,  or  may  be  expected  soon,  to  exem- 
plify the  third  case  in  the  United  States. 

Where  duties  on  the  materials  of  manufactures  are  not  laid  for  the  pur- 
pose of  preventing  a  competition  with  some  domestic  production,  the  same 
reasons  which  recommend,  as  a  general  rule,  the  exemption  of  those  mate- 
rials from  duties,  would  recommend,  as  a  like  general  rule,  the  allowance  of 
drawbacks  in  favor  of  the  manufacturer.  Accordingly,  such  drawbacks  are 
familiar  in  countries  which  systematically  pursue  the  business  of  manufac- 
tures, which  furnishes  an  argument  for  the  observance  of  a  similar  policy 
in  the  United  States;  and  the  idea  has  been  adopted  by  the  laws  of  the 
Union,  in  the  instances  of  salt  and  molasses.  It  is  believed  that  it  will  be 
found  advantageous  to  extend  it  to  some  other  articles. 

VIII.  The  encouragement  of  new  inventions  and  discoveries  at  home, 
and  of  the  introduction  into  the  United  States  of  such  as  may  have 
been  made  in  other  countries;  particularly  those  ivhich  relate  to  ma- 
chinery. 

This  is  among  the  most  useful  and  unexceptionable  of  the  aids  which  can 
be  given  to  manufactures.  The  usual  means  of  that  encouragement  are  pe- 
cuniary rewards,  and,  for  a  time,  exclusive  privileges.  The  first  must  be 
employed,  according  to  the  occasion,  and  the  utility  of  the  invention  or 
discovery.  For  the  last,  so  far  as  respects  ."authors  and  inventors,"  pro- 
vision has  been  made  by  law.  But  it  is  desirable,  in  regard  to  improve- 
ments, and  secrets  of  extraordinary  value,  to  be  able  to  extend  the  same  be- 
nefit to  introducers,  as  well  as  authors  and  inventors;  a  policy  which  has 
been  practised  with  advantage  in  other  countries.  Here,  however,  as  in 
some  other  cases,  there  is  cause  to  regret,  that  the  competency  of  the  author- 
ity of  the  national  government  to  the  good  which  might  be  done,  is  not 
without  a  question.  Many  aids  might  be  given  to  industry,  many  internal 
improvements  of  primary  magnitude  might  be  promoted,  by  an  authority 


1791.]  SECRETARY  OF  THE  TREASURY.  ]  1 5 

operating  throughout  the  Union,  which  cannot  he  effected  as  well,  if  at  all, 
by  an  authority  confined  within  the  limits  of  a  single  State. 

But  if  the  legislature  of  the  Union  cannot  do  all  the  good  that  might  be 
wished,  it  is  at  least  desirable  that  all  may  be  done  which  is  practicable. 
Means  for  promoting  the  introduction  of  foreign  improvements,  though  less 
efficaciously  than  might  be  accomplished  with  more  adequate  authority,  will 
form  a  part  of  the  plan  intended  to  be  submitted  in  the  close  of  this  report. 
•  It  is  customary  with  manufacturing  nations  to  prohibit,  under  severe  pe- 
nalties, the  exportation  of  implements  and  machines,  which  they  have  either 
invented  or  improved.  There  are  already  objects  for  a  similar  regulation 
in  the  United  States;  and  others  may  be  expected  to  occur,  from  time  to  time. 
The  adoption  of  it  seems  to  be  dictated  by  the  principle  of  reciprocity. 
Greater  liberality,  in  such  respects,  might  better  comport  with  the  general 
spirit  of  the  country;  but  a  selfish  and  exclusive  policy,  in  other  quarters, 
will  not  always  permit  the  free  indulgence  of  a  spirit  which  would  place  us 
upon  an  unequal  footing.  As  far  as  prohibitions  tend  to  prevent  foreign 
competitors  from  deriving  the  benefit  of  the  improvements  made  at  home., 
they  tend  to  increase  the  advantages  of  those  by  whom  they  may  have  been 
introduced,  and  operate  as  an  encouragement  to  exertion. 

IX.  Judicious  regulations  for  the  inspection  of  manufactured  com>~ 
•modities. 

This  is  not  among  the  least  important  of  the  means  by  which  the  pros 
perity  of  manufactures  may  be  promoted.  It  is,  indeed,  in  many  cases,  one 
of  the  most  essential.  Contributing  to  prevent  frauds  upon  consumers  at 
home,  and  exporters  to  foreign  countries — to  improve  the  quality  and  pre- 
serve the  character  of  the  national  manufactures,  it  cannot  fail  to  aid  the 
expeditious  and  advantageous  sale  of  them,  and  to  serve  as  a  guard  against 
successful  competition  from  other  quarters.  The  reputation  of  the  flour 
and  lumber  of  some  States,  and  of  the  potash  of  others,  has  been  establish- 
ed by  an  attention  to  this  point.  And  the  like  good  name  might  be  pro- 
cured for  those  articles,  wheresoever  produced,  by  a  judicious  and  uniform 
system  of  inspection,  throughout  the  ports  of  the  United  States.  A  like 
system  might  also  be  extended  with  advantage  to  other  commodities. 

X.  The  facilitating  of  pecuniary  remittances  from  place  to  place — 
Is  a  point  of  considerable  moment  to  trade  in  general,  and  to  manufac- 
tures in  particular,  by  rendering  more  easy  the  purchase  of  raw  materials 
and  provisions,  and  the  payment  for  manufactured  supplies.  A  general  cir- 
culation of  bank  paper,  which  is  to  be  expected  from  the  institution  lately 
established,  will  be  a  most  valuable  mean  to  this  end.  But  much  good 
would  also  accrue  from  some  additional  provisions  respecting  inland  bills  of 
exchange.  If  those  drawn  in  one  State  payable  in  another,  were  made  ne- 
gotiable every  where,  and  interest  and  damages  allowed  in  case  of  protest, 
it  would  greatly  promote  negotiations  between  the  citizens  of  different 
States,  by  rendering  them  more  secure;  and  with  it  the  convenience  and  ad- 
vantage of  the  merchants  and  manufacturers  of  each. 

XL    The  facilitating  of  the  transportation  of  commodities. 

Improvements  favoring  this  object  intimately  concern  all  the  domestic  in- 
terests of  a  community;  but  they  may,  without  impropriety,  be  mentioned 
as  having  an  important  relation  to  manufactures.  There  is,  perhaps,  scarcely 
any  thing,  which  has  been  better  calculated  to  assist  the  manufacture  oil 
16  . 


H6  REPORTS  OF  THE  rj  7  9  j  t 

Great  Britain,  than  the  meliorations  of  the  public  roads  of  that  kingdom^ 
and  the  great  progress  which  has  been  of  late  made  in  opening  canals.  Of  the 
former  the  United  States  stand  much  in  need*  for  the  latter  they  present 
uncommon  facilities. 

The  symptoms  of  attention  to  the  improvement  of  inland  navigation, 
which  have  lately  appeared  in  some  quarters,  must  fill  with  pleasure  every 
breast  warmed  with  a  true  zeal  for  the  prosperity  of  the  country.  These  ex- 
amples, it  is  to  be  hoped,  will  stimulate  the  exertions  of  the  government  and 
citizens  of  every  State.  There  can  certainly  be  no  object  more  worthy  of 
the  cares  of  the  local  administrations;  and  it  were  to  be  wished  that  there 
was  no  doubt  of  the  power  of  the  national  government  to  lend  its  direct 
aid  on  a  comprehensive  plan.  This  is  one  of  those  improvements  which 
could  be  prosecuted  with  more  efficacy  by  the  whole,  than  by  any  part  or 
parts  of  the  JtJnion.  There  are  cases  in  which  the  general  interest  will  be 
in  danger  to  be  sacrificed  to  the  collision  of  some  supposed  local  interests. 
Jealousies,  in  matters  of  this  kind,  are  as  apt  to  exist,  as  they  are  apt  to  be 
erroneous. 

The  following  remarks  are  sufficiently  judicious  and  pertinent  to  deserve 
a  literal  quotation:  "  Good  roads,  canals,  and  navigable  rivers,  by  diminish- 
ing the  expense  of  carriage,  put  the  remote  parts  of  a  country  more  nearly 
upon  a  level  with  those  in  the  neighborhood  of  the  town.  They  are,  upon 
that  account,  the  greatest  of  all  improvements.  They  encourage  the  culti- 
vation of  the  remote,  which  must  always  be  the  most  extensive  circle  of 
the  country.  They  are  advantageous  to  the  town,  by  breaking,  down  the 
monopoly  of  the  country  in  its  neighborhood.  They  are  advantageous, 
even  to  that  part  of  the  country.  Though  they  introduce  some  rival  com- 
modities into  the  old  market,  they  open  many  new  markets  to  its  produce. 
Monopoly,  besides,  is  a  great  enemy  to  good  management,  which  can  never 
be  universally  established,  but  in  consequence  of  that  free  and  universal 
competition,  which  forces  every  body  to  have  recourse  to  it  for  the  sake  of 
self-defence.  It  is  not  more  than  fifty  years  ago,  that  some^f  the  counties 
in  the  neighborhood  of  London  petitioned  the  parliament  against  the  exten- 
sion of  the  turnpike  roads  into  the  remoter  counties.  Those  remoter  coun- 
ties, they  pretended,  from  the  cheapness  of  labor,  would  be  able  to  sell 
their  grass  and  corn  cheaper  in  the  London  market,  than  themselves,  and 
they  would  thereby  reduce  their  rents,  and  ruin  their  cultivation.  Their 
rents,  however,  have  risen,  and  their  cultivation  has  been  improved  since 
that  time." 

Specimens  of  a  spirit  similar  to  that  which  governed  the  counties  here 
spoken  of,  present  themselves  too  frequently  to  the  eye  of  an  impartial  ob- 
server, and  render  it  a  wish  of  patriotism,  that  the  body  in  this  country  in 
whose  councils  a  local  or  partial  spirit  is  least  likely  to  predominate,  were  at 
liberty  to  pursue  and  promote  the  general  interest  in  those  instances,  in 
which  there  might  be  danger  of  the  interference  of  such  a  spirit. 

The  foregoing  are  the  principal  of  the  means  by  which  the  growth  of 
manufactures  is  ordinarily  promoted.  It  is,  however,  not  merely  necessary 
that  the  measures  of  government  which  have  a  direct  view  to  manufactures, 
should  be  calculated  to  assist  and  protect  them,  but  that  those  which  only 
collaterally  affect  them  in  the  general  course  of  the  administration,  should  be 
guarded  from  any  peculiar  tendency  to  injure  them. 

There  are  certain  species  of  taxes,  which  are  apt  to  be  oppressive  to  dif- 
ferent parts  of  the  community,  and  among  other  ill  effects,  have  a  very  un~ 


1791..]  SECRETARY  OF  THE  TREASURY.  un- 

friendly aspect  towards  manufactures.  All  poll  or  capitation  taxes,  are  of 
this  nature.  They  either  proceed  according  to  a  fixed  rate,  which  operates 
unequally  and  injuriously  to  the  industrious  poor,  or  they  vest  a  discretion 
in  certain  officers,  to  make  estimates  and  assessments  which  are  necessarily 
vague,  conjectural,  and  liable  to  abuse.  They  ought,  therefore,  to  be  ab- 
stained from  in  all  but  cases  of  distressing  emergency. 

All  such  taxes  (including  all  taxes  on  occupations,)  which  proceed  according 
to  the  amount  of  capital  supposed  to  be  employed  in  a  business,  or  of  profits 
supposed  to  be  made  in  it,  are  unavoidably  hurtful  to  industry.  It  is  in  vain 
that  the  evil  may  be  endeavored  to  be  mitigated,  by  leaving  it,  in  the  first 
instance,  in  the  option  of  the  party  to  be  taxed,  to  declare  the  amount  of 
Iris  capital  or  profits. 

Men  engaged  in  any  trade  or  business,  have  commonly  weighty  reasons 
to  avoid  disclosures,  which  would  expose,  with  any  thing  like  accuracy,  the 
real  state  of  their  affairs.  They  most  frequently  find  it  better  to  risk  oppres- 
sion, than  to  avail  themselves  of  so  inconvenient  a  refuge — and  the  conse- 
quence is,  that  they  often  suffer  oppression. 

When  the  disclosure,  too,  if  made,  is  not  definitive,  but  controllable  by 
the  discretion,  or,  in  other  words,  by  the  passions  and  prejudices  of  the  reve- 
nue officers,  it  is  not  only  an  ineffectual  protection,  but  the  possibility  of  its 
being  so,  is  an  additional  reason  for  not  resorting  to  it. 

Allowing  to  the  public  officers  the  most  equitable  dispositions,  yet,  where 
they  are  to  exercise  a  discretion  without  certain  data,  they  cannot  fail  to  be 
often  misled  by  appearances.  The  quantity  of  business  which  seems  to  be 
going  on,  is,  in  a  vast  number  of  cases,  a  very  deceitful  criterion  of  the  pro- 
fits which  are  made;  yet  it  is,  perhaps,  the  best  they  can  have,  and  it  is  the 
one  on  which  they  will  most  naturally  rely.  A  business,  therefore,  which 
Tnay  rather  require  aid  from  the  government,  than  be  in  a  capacity  to  be 
contributory  to  it,  may  find  itself  crushed  by  the  mistaken  conjectures  of 
the  assessors  of  taxes.    . 

Arbitrary  taxes,  under  which  denomination  are  comprised  all  those  that 
leave  the  quantum  of  the  tax  to  be  raised  on  each  person  to  the  discretion  of 
certain  officers,  are  as  contrary  to  the  genius  of  liberty,  as  to  the  maxims  of 
industry."  In  this  light,  they  have  been  viewed  by  the  most  judicious  ob- 
servers on  government,  who  have  bestowed  upon  them  the  severest  epithets 
of  reprobation,  as  constituting  one  of  the  worst  features  usually  to  be  met 
with  in  the  practice  of  despotic  governments. 

It  is  certain,  at  least,  that  such  taxes  are  particularly  inimical  to  the  succees 
of  manufacturing  industry,  and  ought  carefully  to  be  avoided  by  a  govern- 
ment which  desires  to  promote  it. 

The  great  copiousness  of  the  subject  of  this  report,  has  insensibly  led  to 
a  more  "lengthy  preliminary  discussion,  than  was  originally  contemplated  or 
intended.  It  appeared  proper  to  investigate  principles,  to  consider  objec- 
tions, and  to  endeavor  to  establish  the  utility  of  the  thing  proposed  to  be 
encouraged,  previous  to  a  specification  of  the  objects  which  might  occur,  as 
meriting  or  requiring  encouragement,  and  of  the  measures  which  might  be 
proper  in  respect  to  each.  The  first  purpose  having  been  fulfilled,  it  re- 
mains to  pursue  the  second. 

In  the  selection  of  objects,  five  circumstances  seem  entitled  to  particular 
attention:  The  capacity  of  the  country  to  furnish  the  raw  material;  the 
degree  in  which  the  nature  of  the  manufacture  admits  of  a  substitute  for 
vmanual  labor  in  machinery;  the  facility  of  execution;  the  extensiveriess  of 


18  REPORTS  OF  THE 


[1791, 


the  uses  to  which  the  article  can  be  applied;  its  subserviency  to  other  inter- 
ests, particularly  the  great  one  of  national  defence.  There  are,  however, 
objects  to  which  these  circumstances  are  little  applicable,  which,  for  some 
special  reasons,  may  have  a  claim  to  encouragement. 

A  designation  of  the  principal  raw  material  of  which  each  manufacture  is 
composed,  will  serve  to  introduce  the  remarks  upon  it,  as  in  the  first  place, 

IRON. 

The  manufactures  of  this  article  are  entitled  to  pre-eminent  rank.  None 
are  more  essential  in  their  kinds,  nor  so  extensive  in  their  uses.  They  con- 
stitute, in  whole,  or  in  part,  the  implements  or  the  materials,  or  both,  of  al- 
most every  useful  occupation.  Their  instrumentality  is  every  where  con- 
spicuous. 

It  is  fortunate  for  the  United  States  that  they  have  peculiar  advantages 
for  deriving  The  full  benefit  of  this  most  valuable  material,  and  they  have 
every  motive  to  improve  it  with  systematic  care.  It  is  to  be  found  in  va- 
rious parts  of  the  United  States,  in  great  abundance,  and  of  almost  every 
quality;  and  fuel,  the  chief  instrument  in  manufacturing  it,  is  both  cheap 
and  plenty.  This  particularly  applies  to  charcoal;  but  there  are  productive 
coal  mines  already  in  operation,  and  strong  indications  that  the  material  is  to 
be  found  in  abundance,  in  a  variety  of  other  places. 

The  inquiries  to  which  the  subject  of  this  report  has  led,  have  been  an- 
swered with  proofs,  that  manufactories  of  iron,  though  generally  understood 
to  be  extensive,  are  far  more  so  than  is  commonly  supposed.  The  kinds  in 
which  the  greatest  progress  has  been  made,  have  been  mentioned  in  another 
place,  and  need  not  be  repeated ;  but  there  is  little  doubt  that  every  other  kind, 
with  due  cultivation,  will  rapidly  succeed.  It  is  worthy  of  remark,  that 
several  of  the  particular  trades  of  which  it  is  the  basis,  are  capable  of  being 
carried  on  without  the  aid  of  large  capitals. 

Iron-works  have  greatly  increased  in  the  United  States,  and  are  pro- 
secuted with  much  more  advantage  than  formerly.  The  average  price, 
before  the  revolution,  was  about  sixty-four  dollars  per  ton;  at  present,  it  is 
about  eighty;  a  rise  which  is  chiefly  to  be  attributed  to  the  increase  of 
manufactures  of  the  material. 

The  still  further  extension  and  multiplication  of  such  manufactures,  will 
have  the  double  effect  of  promoting  the  extraction  of  the  metal  itself,  and 
of  converting  it  to  a  greater  number  of  profitable  purposes. 

Those  manufactures,  too,  unite,  in  a  greater  degree  than  almost  any 
others,  the  several  requisites  which  have  been  mentioned  as  proper  to  be 
consulted  in  the  selection  of  objects. 

The  only  further  encouragement  of  manufactories  of  this  article,  the 
propriety  of  which  may  be  considered  as  unquestionable,  seems  to  be  an 
increase  of  the  duties  on  foreign  rival  commodities. 

Steel  is  a  branch  which  lias  already  made  a  considerable  progress,  and  it 
is  ascertained  that  some  new  enterprises,  on  a  more  extensive  sale,  have 
been  lately  set  on  foot.  The  facility  of  carrying  it  to  an  extent  which  will 
supply  all  internal  demands,  and  furnish  a  considerable  surplus  for  exporta- 
tion, cannot  be  doubted.  The  duty  upon  the  importation  of  this  article, 
which  is  at  present  seventy-five  cents  per  cwt,  may,  it  is  conceived,  be 
safely  and  advantageously  extended  to  one  hundred  cents.  It  is  desirable, 
by  decisive  arrangements,  to  second  the  efforts  which  are  making  in  so  very 
valuable  a  branch. 


1791.1  SECRETARY  OF  THE  TREASURY.  119 

The  United  States  already,  in  a  great  measure,  supply  themselves  with  nails 
and  spikes.  They  are  able,  and  ought  certainly  to  do  it  entirely.  The  first 
and  most  laborious  operation,  in  this  manufacture,  is  performed  by  water- 
mills;  and  of  the  persons  afterwards  employed,  a  great  proportion  are  boys, 
whose  early  habits  of  industry  are  of  importance  to  the  community,  to  the 
present  support  of  their  families,  and  to  their  own  future  comfort.  It  is  not 
less  curious  than  true,  that  in  certain  parts  of  the  country,  the  making  of 
nails  is  an  occasional  family  manufacture. 

The  expediency  of  an  additional  duty  on  these  articles  is  indicated  by  an 
important  fact.  About  1,800,000  pounds  of  them  were  imported  into  the 
United  States,  in  the  course  of  a  year,  ending  the  30th  of  September,  1790. 
A  duty  of  two  cents  per  pound  would,  it  is  presumable,  speedily  put  an  end 
to  so  considerable  an  importation.  And  it  is,  in  every  view,  proper  that  an 
end  should  be  put  to  it. 

The  manufacture  of  these  articles,  like  that  of  some  others,  suffers  from 
the  carelessness  and  dishonesty  of  a  part  of  those  who  carry  it  on.  An 
inspection  in  certain  cases  might  tend  to  correct  the  evil.  It  will  deserve 
consideration,  whether  a  regulation  of  this  sort  cannot  be  applied,  without 
inconvenience,  to  the  exportation  of  the  articles,  either  to  foreign  countries,- 
or  from  one  State  to  another. 

The  implements  of  husbandry  are  made  in  several  States  in  great  abund- 
ance. In  many  places,  it  is  done  by  the  common  blacksmiths.  And  there 
is  no  doubt  that  an  ample  supply  for  the  whole  country  can,  with  great  ease, 
be  procured  among  ourselves. 

Various  kinds  of  edged  tools  for  the  use  of  mechanics  are  also  made;  and 
a  considerable  quantity  of  hollow  wares;  though  the  business  of  castings 
has  not  yet  attained  the  perfection  which  might  be  wished.  It  is,  however, 
improving,  and  as  there  are  respectable  capitals  in  good  hands,  embarked  in 
the  prosecution  of  those  branches  of  iron  manufactories  which  are  yet  in 
their  infancy,  they  may  all  be  contemplated  as  objects  not  difficult  to  be  ac- 
quired. 

To  ensure  the  end,  it  seems  equally  safe  and  prudent  to  extend  the  duty, 
ad  valorem,  upon  all  manufactures  of  iron,  or  of  which  iron  is  the  article  of 
chief  value,  to  ten  per  cent. 

Fire-arms  and  other  military  weapons,  may,  it  is  conceived,  be  placed, 
without  inconvenience,  in  the  class  of  articles  rated  at  fifteen  per  cent. 
There  exist  already  manufactories  of  these  articles,  which  only  require  the 
stimulus  of  a  certain  demand  to  render  them  adequate  to  the  supply  of  the 
United  States. 

It  would  also  be  a  material  aid  to  manufactures  of  this  nature,  as  well  as 
a  mean  of  public  security,  if  provision  should  be  made  for  an  annual  pur- 
chase of  military  weapons  of  home  manufacture,  to  a  certain  determinate 
extent,  in  order  to  the  formation  of  arsenals;  and  to  replace,  from  time  to 
time,  such  as  should  be  withdrawn  for  use,  so  as  always  to  have  in  store  the 
quantity  of  each  kind  which  should  be  deemed  a  competent  supply. 

But  it  may  hereafter  de»erve  legislative  consideration,  whether  manufac- 
tories of  all  the  necessary  weapons  of  war  ought  not  to  be  established  on 
account  of  the  government  itself.  Such  establishments  are  agreeable  to  the 
usual  practice  of  nations,  and  that  practice  seems  founded  on  sufficient 
reason. 

There  appears  to  be  an  improvidence  in  leaving  these  essential  instru- 
ments of  national  defence  to  the  casual  speculations  of  individual  adventure; 


120  REPORTS  OF  THE  [17$L 

a  resource  which  can  less  be  relied  upon,  in  this  case,  than  in  most  others; 
the  articles  in  question  not  being  objects  of  ordinary  and  indispensable  pri- 
vate consumption  or  use.  As  a  general  rule,  manufactories  on  the  imme- 
diate account  of  government  are  to  be  avoided;  but  this  seems  to  be  one  of 
the  few  exceptions  which  that  rule  admits,  dependingon  very  special  reasons. 

Manufactures  of  steel,  generally,  -or  of  which  steel  is  the  article  of  chief 
value,  may  with  advantage  be  placed  in  the  class  of  goods  -rated  at  seven 
and  an  half  per  cent.  As  manufactures  of  this  kind  have  not  yet  made  any 
considerable  progress,  it  is  a  reason  for  not  rating  them  as  high  as  -those  of 
iron;  but  as  this  material  is  the  basis  of  them,  and  as  their  extension  is  not 
less  practicable  than  important,  it  is  desirable  to  promote  it  by  a  somewhat 
higher  duty  than  the  present. 

.  A  question  arises,  how  far  it  might  be  expedient  to  permit  the  importation 
of  iron  in  pigs^and  bars  free  from  duty.  It  would  certainly  be  favorable  to 
manufacturers  of  the  article;  but  the  doubt  is,  whether  it  might  not  interfere 
with  its  production. 

Two  circumstances,  however,  abate,  if  they  do  not  remove  apprehension, 
on  this  score;  one  is,  the  considerable  increase  of  price,  which  has  already 
been  remarked,  and  which  renders  it  probable,  that  the  free  admission  of 
foreign  iron  would  not  be  inconsistent  with  an  adequate  profit  to  the  pro- 
prietors of  iron-works;  the  other  is  the  augmentation  of  demand  which 
would  be  likely  to  attend  the  increase  of  manufactures  of  the  article,  in  con- 
sequence of  the  additional  encouragements  proposed  to  be  given.  But 
caution,  nevertheless,  in  a  matter  of  this  kind,  is  most  adviseable.  The 
measure  suggested  ought,  perhaps,  rather  to  be  contemplated,  subject  to  the 
lights  of  further  experience,  than  immediately  adopted. 

COPPER. 

The  manufactures  of  which  this  article  is  susceptible,  are  also  of  great 
extent  and  utility.  Under  this  description,  those  of  brass,  of  which  it  is 
the  principal  ingredient,  are  intended  to  be  included. 

The  material  is  a  natural  production  of  the  country.  Mines  of  copper 
have  actually  been  wrought,  and  with  profit  to  the  undertakers,  though 
it  is  not  known  that  any  are  now  in  this  condition.  And  nothing  is  easier 
than  the  introduction  of  it  from  other  countries,  on  moderate  terms  and  in 
great  plenty. 

Coppersmiths  and  brass  founders,  particularly  the  former,  are  numerous 
in  the  United  States;  some  of  whom  carry  on  business  to  a  respectable 
extent. 

To  multiply  and  extend  manufactories  of  the  materials  in  question,  is 
worthy  of  attention  and  effort.  In  order  to  this,  it  is  desirable  to  facilitate 
a  plentiful  supply  of  the  materials.  And  a  proper  mean  to  this  end  is,  to 
place  them  in  the  class  of  free  articles.  Copper  in  plates  and  brass,  are  al- 
ready in  this  predicament;  but  copper  in  pigs  and  bars  is  not;  neither  is 
lapis  calaminaris,  which,  together  with  copper  and  charcoal,  constitute  the 
component  ingredients  of  brass.  The  exemption  from  duty,  by  parity  of 
reason,  ought  to  embrace  all  such  of  these  articles  as  are  objects  of  im- 
portation. 

An  additional  duty  on  brass  wares,  will  tend  to  the  general  end  in  view. 
These  now  stand  at  five  per  cent,  while  those  of  tin,  pewter,  and  copper, 
are  rated  at  seven  and  an  half.  There  appears  to  be  a  propriety  in  every 
view,  in  placing  brass  wares  upon  the  same  level  with  them;  and  it  merits 


1791.]  SECRETARY  OF  THE  TREASURY-  I2j 

consideration,  whether  the  duty  upon  all  of  them  ought  not  to  be  raised  to 
ten  per  cent. 

LEAD. 

There  are  numerous  proofs  that  this  material  abounds  in  the  United  States, 
and  requires  little  to  unfold  it  to  an  extent  more  than  equal  to  every  domes- 
tie  occasion.  A  prolific  mine  of  it  has  long  been  open  in  the  south-western 
parts  of  Virginia,  and  under  a  public  administration,  during  the  late  war, 
yielded  a  considerable  supply  for  military  use.  This  is  now  in  the  hands  of 
individuals,  who  not  only  carry  it  on  with  spirit,  but  have  established  manu- 
factories of  it  at  Richmond  in  the  same  State. 

The  duties  already  laid  upon  the  importation  of  this  article,  either  in  its- 
unmanufactured  or  manufactured  state,  ensure  it  a  decisive  advantage  in  the 
home  market,  which  amounts  to  considerable  encouragement.  If  the  duty 
on  pewter  wares  should  be  raised,  it  would  afford  a  further  encouragement 
Nothing  else  occurs  as  proper  to  be  added. 

FOSSIL  COAL.  . 

This,  as  an  important  instrument  of  manufactures,  may,  without  impro* 
priety,  be  mentioned  among  the  subjects  of  this  report. 

A  copious  supply  of  it  would  be  of  great  consequence  to  the  iron  branch. 
As  an  article  of  household  fuel,  also,  it  is  an  interesting  production;  the  utility 
of  which  must  increase  in  proportion  to  the  decrease  of  wood,  by  the  pro- 
gress of  settlement  and  cultivation.  And  its  importance  to  navigation,  as 
an  immense  article  of  transportation  coastwise,  is  signally  exemplified  in 
Great  Britain. 

It  is  known  that  there  are  several  coal  mines  in  Virginia,  now  worked,, 
and  appearances  of  their  existence  are  familiar  in  a  number  of  places. 

The  expediency  of  a  bounty  on  all  this  species  of  coal,  of  home  production, 
and  of  premiums  on  the  opening  of  new  mines,  under  certain  qualifications, 
appears  to  be  worthy  of  particular  examination.  The  great  importance  of 
the  article  will  amply  justify  a  reasonable  expense  in  this  way,  if  it  shall 
appear  to  be  necessary  to,  and  shall  be  thought  likely  to  answer  the  end. 

WOOD. 

Several  manufactures  of  this  article  flourish  in  the  United  States.  Ships 
are  no  where  built  in  greater  perfection,  and  cabinet  wares  generally,  are 
made  little  if  at  all  inferior  to  those  of  Europe.  Their  extent  is  such  as 
to  have  admitted  of  considerable  exportation. 

An  exemption  from  duty,  of  the  several  kinds  of  wood  ordinarily  used 
in  these  manufactures,  seems  to  be  all  that  is  requisite,  by  way  of  encour- 
agement. It  is  recommended  by  the  consideration  of  a  similar  policy  being 
pursued  in  other  countries,  and  by  the  expediency  of  giving  equal  advantages 
to  our  own  workmen  in  wood.  The  abundance  of  timber,  proper  for  ship 
building  in  the  United  States,  does  not  appear  to  be  any  objection  to  it.  The 
increasing  scarcity,  and  growing  importance  of  that  article,  in  the  Euro- 
pean countries,  admonish  the  United  States  to  commence,  and  systematically 
to  pursue,  measures  for  the  preservation  of  their  stock.  Whatever  may  pro- 
mote the  regular  establishment  of  magazines  of  ship  timber,  is  in  various 
views  desirable. 

SKINS. 

There  are  scarcely  any  manufactories  of  greater  importance  than  of  this 
article.    Their  direct  and  very  happy  influence  upon  agriculture,  by  pro- 


log  REPORTS  OF  THE  [1791. 

moting  the  raising  of  cattle  of  different  kinds,  is  a  very  material  recom- 
mendation. 

It  is  pleasing,  too,  to  observe  the  extensive  progress  they  have  made  in 
their  principal  branches,  which  are  so  far  matured  as  almost  to  defy  foreign 
competition.  Tanneries,  in  reticular,  are  not  only  carried  on  as  a  regular 
business,  in  numerous  instances,  and  in  various  parts  of  the  country;  but 
thev  constitute,  in  some  places,  a  valuable  item  of  incidental  family  manu- 
factures.- 

Representations,  however,  have  been  made,  importing  the  expediency  of 
further  encouragement  to  the  leather  branch,  in  two  ways:  one  by  increasing 
the  dutv  on  the  manufactures  of  it,  which  are  imported:  the  other,  by  pro- 
hibiting the  exportation  of  bark.  In  support  of  the  latter,  it  is  alleged,  that 
the  price  of  bark,  chiefly  in  consequence  of  large  expcrtations,  has  risen, 
within  a  few_years,  from  about  three  dollars  to  four  and  an  half  per  cord. 

These  suggestions  are  submitted,  rather  as  intimations  which  merit  con- 
sideration, than  as  matters  the  propriety  of  which  is  manifest.  It  is  not 
clear  that  an  increase  of  duty  is  necessary:  and  in  regard  to  the  prohibition 
desired,  there  is  no  evidence  of  any  considerable  exportation  hitherto;  and 
it  is  most  probable  that,  whatever  augmentation  of  price  may  have  taken 
place,  is  to  be  attributed  to  an  extension  of  the  home  demand,  from  the 
increase  cf  manufacturer,  and  to  a  decrease  of  the  supply,  in  consequence 
of  the  progress  of  settlement,  rather  than  to  the  quantities  which  have  been 
exported. 

It  is  mentioned,  however,  as  an  additional  reason  for  the  prohibition,  that 
one  species  of  the  bark  usually  exported,  is  in  some  sort  peculiar  to  the 
country  and  the  material  of  a  very  valuable  die,  of  great  use  in  some  other 
manufactures,  in  which  the  United  States  have  begun  a  competition. 

There  may  also  be  this  argument  in  favor  of  an  increase  of  duty.  The 
object  is  of  importance  enough  to  claim  decisive  encouragement,  and  the 
progress  which  has  been  made,  leaves  no  room  to  apprehend  any  incon- 
venience on  the  score  of  supply,  from  such  an  increase. 

It  would  be  of  benefit  to  this  branch,  if  glue,  which  is  now  rated  at  five 
per  cent,  were  made  the  object  of  an  excluding  duty.  It  is  already  made 
in  large  quantities  at  various  tanneries,  and,  like  paper,  is  an  entire  economy 
of  materials,  which,  if  not  manufactured,  would  be  left  to  perish.  It  may 
be  placed,  with  advantage,  in  the  class  of  articles  paying  fifteen  per  cent 

GRAIN. 

Manufactures  of  the  several  species  of  this  article  have  a  title  to  peculiar- 
favor:  not  only  because  they  are,  most  of  them,  immediately  connected 
with  the  subsistence  of  the  citizens,  but  because  they  enlarge  the  demand 
for  the  most  precious  products  of  the  soil. 

Though  flour  may,  with  propriety,  be  noticed  as  a  manufacture  of  grain, 
it  were  useless  to  do  it,  but  for  the  purpose  of  submitting  the  expediency  of 
a  general  system  of  inspection,  throughout  the  ports  of  the  United  States; 
which,  if  established  upon  proper  principles,  would  be  likely  to  improve 
the  quality  of  our  flour  every  where,  and  to  raise  its  reputation  in  foreign 
markets.  There  are,  however,  considerations  which  stand  in  the  way  of 
an  arrangement 

Ardent  spirits  and  malt  liquors  are,  next  to  flour,  the  two  principal  manu- 
factures of  grain.  The  first  has  made  a  very  extensive,  the  last  a  consider- 
able progress  in  the  United  States.     In  respect  to  both,  an  exclusive  posses 


1791.]  SECRETARY  OF  THE  TREASURY.  123 

sion  of  the  home  market  ought  to  be  secured  to  the  domestic  manufacturers 
as  fast  as  circumstances  will  admit.  Nothing  is  more  practicable,  and  no- 
thing more  desirable. 

The  existing  laws  of  the  United  States  have  done  much  towards  attaining 
this  valuable  object;  but  some  additions  to  the  present  duties  on  foreign  dis- 
tilled spirits  and  foreign  malt  liquors,  and  perhaps  an  abatement  of  those  on 
home  made  spirits,  would  more  effectually  secure  it;  and  there  does  not  oc- 
cur any  very  weighty  objection  to  either. 

An  augmention  of  the  duties  on  imported  spirits  would  favor,  as  well  the 
distillation  of  spirits  from  molasses,  as  that  from  grain.  And  to  secure  to 
the  nation  the  benefit  of  a  manufacture,  even  of  foreign  materials,  is  always 
of  great,  though  perhaps  of  secondary  importance. 

A  strong  impression  prevails  in  the  minds  of  those  concerned  in  distille- 
ries, (including,  too,  the  most  candid  and  enlightened,)  that  greater  differ- 
ences in  the  rates  of  duty  on  foreign  and  domestic  spirits  are  necessary, 
completely  to  secure  the  successful  manufacture  of  the  latter;  and  there  are 
facts  which  entitle  this  impression  to  attention. 

It  is  known  that  the  price  of  molasses,  for  some  years  past,  has  been  suc- 
cessively rising  in  the  West  India  markets,  owing  partly  to  a  competition 
which  did  not  formerly  exist,  and  partly  to  an  extension  of  demand  in  this 
country;  and  it  is  evident,  that  the  late  disturbances  in  those  islands 
from  which  we  draw  our  principal  supply,  must  so  far  interfere  with  the 
production  of  the  article,  as  to  occasion  a  material  enhancement  of  price. 
The  destruction  and  devastation  attendant  on  the  insurrection  in  Hispaniola, 
in  particular,  must  not  only  contribute  very  much  to  that  effect,  but  may  be 
expected  to  give  it  some  duration.  These  circumstances,  and  the  duty  of 
three  cents  per  gallon  on  molasses,  may  render  it  difficult  for  the  distillers 
of  that  material  to  maintain,  with  adequate  profit,  a  competition  with  the  rum 
brought  from  the  West  Indies,  the  quality  of  which  is  so  considerably  su- 
perior. 

The  consumption  of  geneva,  or  gin,  in  this  country,  is  extensive.  It  is 
not  long  since  distilleries  of  it  have  grown  up  among  us,  to  any  importance. 
They  are  now  becoming  of  consequence,  but  being  still  in  their  infancy, 
they  require  protection. 

It  is  represented  that  the  price  of  some  of  the  materials  is  greater  here 
than  in  Holland,  from  which  place  large  quantities  are  brought;  the  price  of 
labor  considerably  greater;  the  capitals  engaged  in  the  business  there,  much 
larger  than  those  which  are  employed  here;  the  rate  of  profits  at  which  the 
undertakers  can  afford  to  carry  it  on,  much  less;  the  prejudices  in  favor  of 
imported  gin,  strong.  These  circumstances  are  alleged  to  outweigh  the 
charges  which  attend  the  bringing  of  the  article  from  Europe  to  the  United 
States,  and  the  present  difference  of  duty,  so  as  to  obstruct  the  prosecution 
of  the  manufacture  with  due  advantage. 

Experiment  could,  perhaps,  alone  decide,  with  certainty,  the  justness  of 
the  suggestions  which  are  made;  but,  in  relation  to  branches  of  manufacture 
so  important,  it  would  seem  inexpedient  to  hazard  an  unfavorable  issue, 
and  better  to  err  on  the  side  of  too  great,  than  of  too  small  a  difference  in 
the  particular  in  question. 

It  is  therefore  submitted,  that  an  addition  of  two  cents   per  gallon   be 
made  to  the  duty  on  imported  spirits  of  the  first  class  of  proof,  with  a  pro- 
portionable increase  on  those  of  higher  proof;  and  that  a  deduction  of  one 
cent  per  gallon  be  made  from  the  duty  on  spirits  distilled  within  the  United 
17 


124  REPORTS  OF  THE  ["1791. 

States,  beginning  with  the  first  class  of  proof,  and  a  proportionable  deduc- 
tion from  the  duty  on  those  of  higher  proof. 

It  is  ascertained,  that  by  far  the  greatest  part  of  the  malt  liquors  consumed 
in  the  United  States,  are  the  produce  of  domestic*  breweries.  It  is  de- 
sirable, and  in  all  likelihood  attainable,  that  the  whole  consumption  should 
be  supplied  by  ourselves. 

The  malt  liquors  made  at  home,  though  inferior  to  the  best,  are  equal  to 
a  great  part  of  those  which  have  been  usually  imported.  The  progress  al- 
ready made,  is  an  earnest  of  what  may  be  accomplished.  The  growing 
competition  is  an  assurance  of  improvement.  This  will  be  accelerated  by 
measures  tending  to  invite  a  greater  capital  into  this  channel  of  employment. 

To  render  the  encouragement  of  domestic  breweries  decisive,  it  may  be 
adviseable  to  substitute  to  the  present  rates  of  duty,  eight  cents  per  gallon, 
generally;  aridTit  will  deserve  to  be  considered  as  a  guard  against  invasions, 
whether  there  ought  not  to  be  a  prohibition  of  their  importation,  except  in 
casks  of  considerable  capacity.  It  is  to  be  hoped,  that  such  a  duty  would 
banish  from  the  market  foreign  malt  liquors  of  inferior  quality,  and  that 
the  best  kind  only  would  continue  to  be  imported,  till  it  should  be  supplant- 
ed by  the  efforts  of  equal  skill  or  care  at  home. 

Until  that  period,  the  importation,  so  qualified,  would  be  an  useful  stimu- 
lus to  improvement,  and,  in  the  mean  time,  the  payment  of  the  increased 
price  for  the  enjoyment  of  a  luxury,  in  order  to  the  encouragement  of  a 
most  useful  branch  of  domestic  industry,  could  not  reasonably  be  deemed  si 
hardship. 

As  a  further  aid  to  manufacturers  of  grain,  though  upon  a  smaller  scale, 
the  articles  of  starch,  hair-powder,  and  wafers,  may  with  great  propriety  be 
placed  among  those  which  are  rated  at  fifteen  per  cent.  No  manufactures  are 
more  simple,  nor  more  completely  within  the  reach  of  a  full  supply  from 
domestic  sources;  and  it  is  a  policy  as  common  as  it  is  obvious,  to  make 
them  the  objects,  either  of  prohibitionary  duties  or  of  express  prohibition. 

FLAX  AND  HEMP. 

Manufactures  of  these  articles  have  so  much  affinity  to  each  other,  and 
they  are  so  often  blended,  that  they  may,  with  advantage,  be  considered  in 
conjunction.  The  importance  of  the  linen  branch  to  agriculture — -its  pre- 
cious effects  upon  household  industry — the  ease  with  which  the  materials 
can  be  produced  at  home,  to  any  requisite  extent — the  great  advances  which 
have  been  already  made  in  the  coarser  fabrics  of  them,  especially  in  the  fa- 
mily way,  constitute  claims  of  peculiar  force  to  the  patronage  of  govern- 
ment. 

This  patronage  may  be  afforded  in  various  ways;  by  promoting  the  growth 
of  the  materials,  by  increasing  the  impediments  to  an  advantageous  compe- 
tition of  rival  foreign  articles,  by  direct  bounties  or  premiums  upon  the 
home  manufactures. 

1st.  As  to  promoting  the  growth  of  the  materials. 

In  respect  to  hemp,  something  has  been  already  done  by  the  high  duty 
upon  foreign  hemp.  If  the  facilities  for  domestic  production  were  not  un- 
usually great,  the  policy  of  the  duty  on  the  foreign  raw  material  would  be 
highly  questionable,  as  interfering  with  the  growth  of  manufactures  of 
it.  But  making  the  proper  allowances  for  those  facilities,  and  with  an  eye 
to  the  future  and  natural  progress  of  the  country,  the  measure  does  not  ap- 
pear, upon  the  whole,  exceptionable. 


1791.]  SECRETARY  OF  THE  TREASURY.  125 

A  strong  wish  naturally  suggests  itself,  that  some  method  could  be  de- 
vised, of  affording  a  more  direct  encouragement  to  the  growth  both  of  flax  and 
hemp;  such  as  would  be  effectual,  and,  at  the  same  time,  not  attended  with 
too  great  inconveniences.  To  this  end,  bounties  and  premiums  offer  them- 
selves to  consideration;  but  no  modification  of  them  has  yet  occurred,  which 
would  not  either  hazard  too  much  expense,  or  operate  unequally,  in  refer- 
ence to  the  circumstances  of  different  parts  of  the  Union;  and  which  would 
not  be  attended  with  very  great  difficulties  in  the  execution. 

Secondly.  As  to  increasing  the  impediments  to  an  advantageous  compe- 
tition of  rival  foreign  articles. 

To  this  purpose,  an  augmentation  of  the  duties  on  importation  is  the  ob- 
vious expedient,  which,  in  regard  to  certain  articles,  appears  to  be  recom- 
mended by  sufficient  reasons. 

The  principal  of  these  articles  is  sail-cloth;  one  intimately  connected  with 
navigation  and  defence;  and  of  which  a  flourishing  manufactory  is  esta- 
blished at  Boston,  and  very  promising  ones  at  several  other  places. 

It  is  presumed  to  be  both  safe  and  adviseable,  to  place  this  in  the  class  of 
articles  rated  at  ten  per  cent.  A  strong  reason  for  it  results  from  the  con- 
sideration that  a  bounty  of  two-pence  sterling  per  ell  is -allowed  in  Great 
Britain,  upon  the  exportation  of  the  sail -cloth  manufactured  in  that  kingdom. 

It  would  likewise  appear  to  be  good  policy  to  raise  the  duty  to  7%  per 
cent,  on  the  following  articles:  Drillings,  osnaburg,  ticklenburgs,  dowlas, 
canvass,  brown  rolls,  bagging,  and  upon  all  other  linens,  the  first  cost  of 
which,  at  the  place  of  exportation,  does  not  exceed  thirty-five  cents  per 
yard.  A  bounty  of  twelve  and  a  half  per  cent,  upon  an  average,  on  the 
exportation  of  such  or  similar  linens  from  Great  Britain,  encourages  the  ma- 
nufacture of  them  in  that  country,  and  increases  the  obstacles  to  a  success- 
ful competition  in  the  countries  to  which  they  are  sent. 

The  quantities  of  tow  and  other  household  linens  manufactured  in  differ- 
ent parts  of  the  United  States,  and  the  expectations  which  are  derived 
from  some  late  experiments,  of  being  able  to  extend  the  use  of  labor-saving 
machines,  in  the  coarser  fabrics  of  linen,  obviate  the  danger  of  inconveni- 
ence from  an  increase  of  the  duty  upon  such  articles,  and  authorize  a  hope 
of  speedy  and  complete  success  to  the  endeavors  which  may  be  used  for 
procuring  an  internal  supply. 

Thirdly.  As  to  direct  bounties  or  premiums  upon  the  manufactured  arti- 
eles. 

To  afford  more  effectual  encouragement  to  the  manufacture,  and  at  the 
same  time  to  promote  the  cheapness  of  the  article,  for  the  benefit  of  naviga- 
tion, it  will  be  of  great  use  to  allow  a  bounty  of  two  cents  per  yard,  on  all 
sail-cloth  which  is  made  in  the  United  States,  from  materials  of  their  own 
growth.  This  would  also  assist  the  culture  of  those  materials.  An  encour- 
agement of  this  kind,  if  adopted,  ought  to  be  established  for  a  moderate 
term  of  years,  to  invite  to  new  undertakings,  and  to  an  extension  of  the  old. 
This  is  an  article  of  importance  enough  to  warrant  the  employment  of  ex- 
traordinary means  in  its  favor. 

COTTON. 

There  is  something  in  the  texture  of  this  material,  which  adapts  it,  in  a 
peculiar  degree,  to  the  application  of  machines.  The  signal  utility  of  the 
mill  for  spinning  of  cotton,  not  long  since  invented  in  England,  has  been 
noticed  in  another  place;  but  there  are  other  machines  scarcely  inferior  ill 
utility,  which,  in  the  different  manufactories  of  this  article,  are  employed, 
either  exclusively,  or  with  more  than  ordinary  effect.     This  very  important 


120  REPORTS  OF  THE  [1791. 

circumstance  recommends  the  fabrics  of  cotton,  in  a  more  particular  man- 
ner, to  a  country  in  which  a  defect  of  hands  constitutes  the  greatest  obsta- 
cle to  success. 

The  variety  and  extent  of  the  uses  to  which  the  manufactures  of  this  ar- 
ticle are  applicable,  is  another  powerful  argument  in  their  favor. 

And  the  faculty  of  the  United  States  to  produce  the  raw  material  in  abun- 
dance, and  of  a  quality  which,  though  alleged  to  be  inferior  to  some  that 
is  produced  in  other  quarters,  is  nevertheless  capable  of  being  used  with 
advantage  in  many  fabrics,  and  is  probably  susceptible  of  being  carried  by  a 
more  experienced  culture,  to  much  greater  perfection,  suggests  an  additional 
and  a  very  cogent  inducement  to  the  vigorous  pursuit  of  the  cotton  branch, 
in  its  several  subdivisions. 

How  much  has  been  already  done,  has  been  stated  in  a  preceding  part  of 
this  report.     

In  addition  to  this,  it  may  be  announced,  that  a  society  is  forming,  with 
a  capital  which  is  expected  to  be  extended  to  at  least  half  a  million  of  dol- 
lars; on  behalf  of  which,  measures  are  already  in  train  for  prosecuting,  on 
a  large  scale,  the  making  and  printing  of  cotton  goods. 

These  circumstances  conspire  to  indicate  the  expediency  of  removing  any 
obstructions  which  may  happen  to  exist,  to  the  advantageous  prosecution  of 
the  manufactories  in  question,  and  of  adding  such  encouragements  as  may 
appear  necessary  and  proper. 

The  present  duty  of  three  cents  per  pound,  on  the  foreign  raw  material, 
is  undoubtedly  a  very  serious  impediment  to  the  progress  of  those  manu- 
factories. 

The  injurious  tendency  of  similar  duties,  either  prior  to  the  establish- 
ment, or  in  the  infancy  of  the  domestic  manufacture  of  the  article,  as  it  re- 
gards the  manufacture,  and  their  worse  than  inutility,  in  relation  to  the 
home  production  of  the  material  itself,  have  been  anticipated,  particularly 
in  discussing  the  subject  of  pecuniary  bounties. 

Cotton  has  not  the  same  pretensions  with  hemp,  to  form  an  exception  to 
the  general  rule. 

Not  being,  like  hemp,  an  universal  production  of  the  country,  it  affords 
less  assurance  of  an  adequate  internal  supply;  but  the  chief  objection  arises 
from  the  doubts  which  are  entertained,  concerning  the  quality  of  the  na- 
tional cotton.  It  is  alleged  that  the  fibre  of  it  is  considerably  shorter  and 
weaker,  than  that  of  some  other  places;  and  it  has  been  observed,  as  a  ge- 
neral rule,  that  the  nearer  the  place  of  growth  to  the  equator,  the  better  the 
quality  of  the  cotton.  That  which  comes  from  Cayenne,  Surinam,  and 
Demarara,  is  said  to  be  preferable,  even  at  a  material  difference  of  price,  to 
the  cotton  of  the  islands. 

While  a  hope  may  reasonably  be  indulged,  that,  with  due  care  and  atten- 
tion, the  national  cotton  may  be  made  to  approach  nearer  than  it  now  does 
to  that  of  regions  somewhat  more  favored  by  climate;  and  while  facts  author- 
ize an  opinion  that  very  great  use  may  be  made  of  it,  and  that  it  is  a  resource 
which  gives  greater  security  to  the  cotton  fabrics  of  this  country,  than  can 
be  enjoyed  by  any  which  depends  wholly  on  external  supply,  it  will  cer- 
tainly be  wise,  in  every  view,  to  let  our  infant  manufactures  have  the  full  be- 
nefit of  the  best  materials,  on  the  cheapest  terms.  It  is  obvious  that  the  ne- 
cessity of  having  such  materials  is  proportioned  to  the  unskilfulness  and  in- 
experience of  the  workmen  employed,  who,  if  inexpert,  will  not  fail  to  com- 
mit great  waste,  where  the  materials  they  are  to  work  with  are  of  an  indif- 
ferent kind. 


1791.]  SECRETARY  OF  THE  TREASURY.  127 

To  secure  to  the  national  manufacturers  so  essential  an  advantage,  a  repeal 
of  the  present  duty  on  imported  cotton  is  indispensable. 

A  substitute  for  this,  far  more  encouraging  to  domestic  production,  will  be 
to  grant  a  bounty  on  the  national  cotton,  when-wrought  at  a  home  manufac- 
tory; to  which  a  bounty  on  the  exportation  bf  it  maybe  added.  Either,  or 
both,  would  do  much  more  towards  promoting  the  growth  of  the  article,  than 
the  merely  nominal  encouragement,  which  it  is  proposed  to  abolish.  The  first 
would  also  have  a  direct  influence  in  encouraging  the  manufacture. 

The  bounty  which  has  been  mentioned,  as  existing  in  Great  Britain,  upon 
the  exportation  of  coarse  linens  not  exceeding  a  certain  value,  applies  also  to 
certain  descriptions  of  cotton  goods  of  similar  value. 

This  furnishes  an  additional  argument  for  allowing  to  the  national  manufac- 
turers, the  species  of  encouragement  just  suggested,  and,  indeed,  for  adding 
some  other  aid. 

One  cent  per  yard,  not  less  than  of  a  given  width,  on  all  goods  of  cotton, 
or  of  cotton  and  linen  mixed,  which  are  manufactured  in  the  United  States, 
with  the  addition  of  one  cent  per  pound  weight  of  the  material,  if  made  of 
national  cotton,  would  amount  to  an  aid  of  considerable  importance,  both  to 
the  production  and  to  the  manufacture  of  that  valuable  article.  And  it  is  con- 
ceived that  the  expense  would  be  well  justified  by  the  magnitude  of  the  ob- 

Ject* 

The  printing  and  staining  of  cotton  goods  is  known  to  be  a  distinct  busi- 
ness from  the  fabrication  of  them.  It  is  one  easily  accomplished,  and  which, 
as  it  adds  materially  to  the  value  of  the  article  in  its  white  state,  and  prepares 
it  for  a  variety  of  new  uses,  is  of  importance  to  be  promoted. 

As  imported  cottons,  equally  with  those  which  are  made  at  home,  may  be 
the  objects  of  this  manufacture,  it  will  merit  consideration,  whether  the 
whole,  or  a  part  of  the  duty,  on  the  white  goods,  ought  not  to  be  allowed  to 
be  drawn  back  in  favor  of  those  who  print  or  stain  them.  This  measure 
would  certainly  operate  as  a  powerful  encouragement  to  the  business;  and 
though  it  may,  in  a  degree,  counteract  the  original  fabrication  of  the  arti- 
cles, it  would  probably  more  than  compensate  for  this  disadvantage,  in  the 
rapid  growth  of  a  collateral  branch,  which  is  of  a  nature  sooner  to  attain  to 
maturity.  When  a  sufficient  progress  shall  have  been  made,  the  drawback 
may  be  abrogated,  and  by  that  time  the  domestic  supply  of  the  articles  to  be 
printed  or  stained  will  have  been  extended. 

If  the  duty  of  seven  and  a  half  per  cent.,  on  certain  kinds  of  cotton  goods, 
were  extended  to  all  goods  of  cotton,  or  of  which  it  is  the  principal  material, 
it  would  probably  more  than  counterbalance  the  effect  of  the  drawback  pro- 
posed, in  relation  to  the  fabrication  of  the  article.  And  no  material  objec- 
tion occurs  to  such  an  extension.  The  duty,  then,  considering  all  the  cir- 
cumstances which  attend  goods  of  this  description,  could  not  be  deemed  in- 
conveniently high;  and  it  may  be  inferred,  from  various  causes,  that  the 
prices  of  them  would  still  continue  moderate. 

Manufactories  of  cotton  goods,  not  long  since  established  at  Beverly,  in 
Massachusetts,  and  at  Providence,  in  the  State  of  Rhode  Island,  and  conduct- 
ed with  a  perseverance  corresponding  with  the  patriotic  motives  which  be- 
gan them,  seem  to  have  overcome  the  first  obstacles  to  success;  producing  cor- 
deroys,  velverets,  fustians,  jeans,  and  other  similar  articles,  of  a  quality  which 
will  bear  a  comparison  with  the  like  articles  brought  from  Manchester.  The 
one  at  Providence  has  the  merit  of  being  the  first  in  introducing  into  the 
United  States  the  celebrated  cotton  mill,  which  not  only  furnishes  mate- 


128  REPORTS  OF  THE  [1791. 

rials  for  that  manufactory  itself,  but  for  the  supply  of  private  families  for 
household  manufactures. 

Other  manufactories  of  the  same  material,  as  regular  businesses,  have  also 
been  begun  at  different  places  in  the  State  of  Connecticut,  but  all  upon  a 
smaller  scale  than  those  above-mentioned.  Some  essays  are  also  making  in 
the  printing  and  staining  of  cotton  goods.  There  are  several  small  establish- 
ments of  this  kind  already  on  foot. 

WOOL. 

In  a  country,  the  climate  of  which  partakes  of  so  considerable  a  proportion 
of  winter,  as  that  of  a  great  part  of  the  United  States,  the  woollen  branch  can- 
not be  regarded  as  inferior  to  any  which  relates  to  the  clothing  of  the  inhab- 
itants. 

Household  manufactures  of  this  material  are  carried  on  in  different  parts  of 
the  United  States,  to  a  very  interesting  extent;  but  there  is  only  one  branch, 
which,  as  a  regular  business,  can  be  said  to  have  acquired  maturity.  This 
is  the  making  of  hats. 

Hats  of  wool,  and  of  wool  mixed  with  fur,  are  made  in  large  quantities, 
in  different  States;  and  nothing  seems  wanting,  but  an  adequate  supply  of 
materials,  to  render  the  manufacture  commensurate  with  the  demand. 

A  promising  essay,  towards  the  fabrication  of  cloths',  cassimeres  and  other 
woollen  goods,  is  likewise  going  on  at  Hartford,  in  Connecticut.  Specimens 
of  the  different  kinds  which  are  made,  in  the  possession  of  the  Secretary, 
evince  that  these  fabrics  have  attained  a  very  considerable  degree  of  perfec- 
tion. Their  quality  certainly  surpasses  any  thing  that  could  have  been  look- 
ed for  in  so  short  a  time,  and  under  so  great  disadvantages;  and  conspires, 
with  the  scantiness  of  the  means,  which  have  been  at  the  command  of  the  di- 
rectors, to  form  the  eulogium  of  that  public  spirit,  perseverance,  and  judg- 
ment, which  have  been  able  to  accomplish  so  much. 

To  cherish  and  bring  to  maturity  this  precious  embryo,  must  engage  the 
most  ardent  wishes,  and  proportionable  regret,  as  far  as  the  means  of  doing  it 
may  appear  difficult  or  uncertain. 

Measures  which  should  tend  to  promote  an  abundant  supply  of  wool,  of 
good  quality,  would  probably  afford  the  most  efficacious  aid  that  present 
circumstances  permit. 

To  encourage  the  raising  and  improving  the  breed  of  sheep,  at  home, 
would  certainly  be  the  most  desirable  expedient  for  that  purpose;  but  it  may 
not  be  alone  sufficient,  especially  as  it  is  yet  a  problem,  whether  our  wool  be 
capable  of  such  a  degree  of  improvement  as  to  render  it  fit  for  the  finer  fabrics. 

Premiums  would  probably  be  found  the  best  means  of  promoting  the  do 
mestic,  and  bounties  the  foreign  supply.     The  first  may  be  within  the  com- 
pass of  the  institution  hereafter  to  be  submitted.     The  last  would  require  a 
specific  legislative  provision.     If  any  bounties  are  granted,  they  ought,  of 
course,  to  be  adjusted  with  an  eye  to  quality  as  well  as  quantity. 

A  fund  for  this  purpose  may  be  derived  from  the  addition  of  two  and  a 
half  per  cent,  to  the  present  rate  of  duty  on  carpets  and  carpeting;  an  in- 
crease to  which  the  nature  of  the  articles  suggest  no  objection,  and  Which 
may,  at  the  same  time,  furnish  a  motive  the  more  to  the  fabrication  of  them 
at  home,  towards  which  some  beginnings  have  been  made. 

SILK. 

The  production  of  this  article  is  attended  with  great  facility  in  most  parts 
of  the  United  States.     Some  pleasing  essays  are  making  in  Connecticut,  as 


1791.]  SECRETARY  OF  THE  TREASURY.  129 

well  towards  that,  as  towards  the  manufacture  of  what  is  produced.  Stock- 
ings, handkerchiefs,  ribbons  and  buttons  are  made,  though  as  yet  but  in 
small  quantities. 

A  manufactory  of  lace,  upon  a  scale  not  very  extensive,  has  been  long 
memorable  at  Ipswich,  in  the  State  of  Massachusetts. 

An  exemption  of  the  material  from  the  duty  which  it  now  pays  on  im- 
portation, and  premiums  upon  the  production  to  be  dispensed  under  the  di- 
rection of  the  institution  before  alluded  to,  seem  to  be  the  only  species  of 
encouragement,  adviseable  at  so  early  a  stage  of  the  thing. 

GLASS. 

The  materials  for  making  glass  are  found  every  where.  In  the  United 
States  there  is  no  deficiency  of  them.  The  sands  and  stones  called  tarso, 
which  include  flinty  and  crystalline  substances  generally,  and  the  salts  of 
various  plants,  particularly  of  the  sea-weed  kali,  or  kelp,  constitute  the  es- 
sential ingredients.  An  extraordinary  abundance  of  fuel  is  a  particular  ad- 
vantage enjoyed  by  this  country  for  such  manufactures.  They,  however, 
require  large  capitals,  and  involve  much  manual  labor. 

Different  manufactories  of  glass  are  now  on  foot  in  the  United  States. 
The  present  duty  of  twelve  and  an  half  per  cent,  on  all  imported  articles 
of  glass,  amount  to  a  considerable  encouragement  to  those  manufactories. 
If  any  thing  in  addition  is  judged  eligible,  the  most  proper  would  appear  to 
be  a  direct  bounty  on  window-glass  and  black  bottles. 

The  first  recommends  itself  as  an  object  of  general  convenience;  the  last 
adds  to  that  character  the  circumstance  of  being  an  important  item  in 
breweries.     A  complaint  is  made  of  great  deficiency  in  this  respect. 

GUNPOWDER. 

No  small  progress  has  been  of  late  made  in  the  manufacture  of  this  very 
important  article.  It  may,  indeed,  be  considered  as  already  established^ 
but  its  high  importance  renders  its  further  extension  very  desirable. 

The  encouragements  which  it  already  enjoys,  are  a  duty  of  ten  per  cent, 
on  the  foreign  rival  article,  and  an  exemption  of  saltpetre,  one  of  the 
principal  ingredients  of  which  it  is  composed,  from  duty.  A  like  exemp- 
tion of  sulphur,  another  chief  ingredient,  would  appear  to  be  equally  pro- 
per. No  quantity  of  this  article  has  yet  been,  produced  from  internal 
sources.  The  use  made  of  it  in  finishing  the  bottoms  of  ships,  is  an  addi- 
tional inducement  to  placing  it  in  the  class  of  free  goods.  Regulations  for 
the  careful  inspection  of  the  article,  would  have  a  favorable  tendency. 

PAPER. 

Manufactories  of  paper  are  among  those  which  are  arrived  at  the  greatest 
maturity  in  the  United  States,  and  are  most  adequate  to  national  supply. 
That  of  paper-hangings,  is  a  branch  in  which  respectable  progress  has  been 
made. 

Nothing  material  seems  wanting  to  the  further  success  of  this  valuable 
branch,  which  is  already  protected  by  a  competent  duty  on  similar  imported 
articles. 

In  the  enumeration  of  the  several  kinds  made  subject  to  that  duty,  sheath- 
ing and  cartridge  paper  have  been  omitted.  These  being  the  most  simple 
manufactures  of  the  sort,  and  necessary  to  military  supply,  as  well  as  ship- 
building, recommend  themselves  equally  with  those  of  other  descriptions, 


130  REPORTS  OF  THE  [1791 . 

to  encouragement,  and  appear  to  be  as  fully  within  the  compass  of  domestic 
exertions. 

PRINTED  BOOKS. 

The  great  number  of  presses  disseminated  throughout  the  Union,  seem  to 
afford  an  assurance,  that  there  is  no  need  of  being  indebted  to  foreign  coun- 
tries for  the  printing  of  the  books  which  are  used  in  the  United  States.  A 
duty  of  ten  per  cent,  instead  of  five,  which  is  now  charged  upon  the  article, 
would  have  a  tendency  to  aid  the  business  internally. 

It  occurs  as  an  objection  to  this,  that  it  may  have  an  unfavorable  aspect  to- 
wards literature,  by  raising  the  prices  of  books  in  universal  use  in  private  fami- 
lies, schools,  and  other  seminaries  of  learning.  But  the  difference,  it  is  con- 
ceived, would  be  without  effect. 

As  to  booksTvvhich  usually  fill  the  libraries  of  the  wealthier  classes,  and  of 
professional  men,  such  an  augmentation  of  prices  as  might  be  occasioned  by 
an  additional  duty  of  five  per  cent.,  would  be  too  little  felt  to  be  an  impedi- 
ment to  the  acquisition. 

And  with  regard  to  books  which  may  be  specially  imported  for  the  use  of 
particular  seminaries  of  learning,  and  of  public  libraries,  a  total  exemption 
from  duty  would  be  adviseable,  which  would  go  towards  obviating  the 
objection  just  mentioned.     They  are  now  subject  to  a  duty  of  five  per  cent. 

As  to  the  books  in  most  general  family  use,  the  constancy  and  universali- 
ty of  the  demand,  would  ensure  exertions  to  furnish  them  at  home,  and  the 
means  are  completely  adequate.  It  may  also  be  expected  ultimately,  in  this, 
as  in  other  cases,  that  the  extension  of  the  domestic  manufacture  would  con- 
duce to  the  cheapness  of  the  article. 

It  ought  not  to  pass  unremarked,  that,  to  encourage  the  printing  of  books, 
is  to  encourage  the  manufacture  of  paper. 

REFINED  SUGARS  AND  CHOCOLATE 

Are  among  the  number  of  extensive  and  prosperous  domestic  manufactures. 

Drawbacks  of  the  duties  upon  the  materials  of  which  they  are  respective- 
ly made,  in  cases  of  exportation,  would  have  a  beneficial  influence  upon  the 
manufacture,  and  would  conform  to  a  precedent  which  has  been  already  fur- 
nished in  the  instance  of  molasses,  on  the  exportation  of  distilled  spirits. 

Cocoa,  the  raw  material,  now  pays  a  duty  of  one  cent  per  pound,  while 
chocolate,  which  is  a  prevailing  and  very  simple  manufacture,  is  comprised 
in  the  mass  of  articles  rated  at  no  more  than  five  per  cent. 

There  would  appear  to  be  a  propriety  in  encouraging  the  manufacture  by 
a  somewhat  higher  duty  on  its  foreign  rival  than  is  paid  on  the  raw  material. 
Two  cents  per  pound  on  imported  chocolate,  would,  it  is  presumed,  be  with- 
out inconvenience. 


The  foregoing  heads  comprise  the  most  important  of  the  several  kinds  of 
manufactures  which  have  occurred  as  requiring,  and,  at  the  same  time,  as 
most  proper  for  public  encouragement;  and  such  measures  for  affording  it  as 
have  appeared  best  calculated  to  answer  the  end,  have  been  suggested. 

The  observations  which  have  accompanied  this  delineation  of  objects,  su- 
persede the  necessity  of  many  supplementary  remarks.  One  or  two,  how- 
ever, may  not  be  altogether  superfluous. 

Bounties  are,  in  various  instances  proposed,  as  one  species  of  encourage- 
ment. 


1791.1  SECRETARY  OF  THE  TREASURY.  1 3  j 

It  is  a  familiar  objection  to  them,  that  they  are  difficult  to  be  managed  and 
liable  to  frauds.  But  neither  that  difficulty  nor  this  danger  seems  sufficient- 
ly great  to  countervail  the  advantages  of  which  they  are  productive,  when 
rightly  applied.  And  it  is  presumed  to  have  been  shown,  that  they  are,  in 
some  cases,  particularly  in  the  infancy  of  new  enterprises,  indispensable. 

It  will,  however,  be  necessary  to  guard,  with  extraordinary  circumspec- 
tion, the  manner  of  dispensing  them.  The  requisite  precautions  have  been 
thought  of;  but  to  enter  into  the  detail,  would  swell  this  report,  already  vo- 
luminous, to  a  size  too  inconvenient. 

If  the  principle  shall  not  be  deemed  inadmissible,  the  means  of  avoiding 
an  abuse  of  it  will  not  be  likely  to  present  insurmountable  obstacles.  There 
are  useful  guides  from  practice  in  other  quarters. 

It  shall,  therefore,  only  be  remarked  here,  in  relation  to  this  point,  that 
any  bounty  which  may  be  applied  to  the  manufacture  of  an  article,  cannot, 
with  safety,  extend  beyond  those  manufactories  at  which  the  making  of  the 
article  is  a  regular  trade.  It  would  be  impossible  to  annex  adequate  pre- 
cautions to  a  benefit  of  that  nature,  if  extended  to  every  private  family  in 
which  the  manufacture  was  incidentally  carried  on;  and  its  being  a  merely 
incidental  occupation  which  engages  a  portion  of  time  that  would  otherwise 
be  lost,  it  can  be  advantageously  carried  on  without  so  special  an  aid. 

The  possibility  of  a  diminution  of  the  revenue  may  also  present  itself  as 
an  objection  to  the  arrangements  which  have  been  submitted. 

But  there  is  no  truth  which  may  be  more  firmly  relied  upon,  than  that  the 
interests  of  the  revenue  are  promoted  by  whatever  promotes  an  increase  of 
national  industry  and  wealth. 

In  proportion  to  the  degree  of  these,  is  the  capacity  of  every  country  to 
contribute  to  the  public  treasury;  and  where  the  capacity  to  pay  is  increased, 
or  even  is  not  decreased,  the  only  consequence  of  measures  which  diminish 
any  particular  resource,  is  a  change  of  the  object.  If,  by  encouraging  the 
manufacture  of  an  article  at  home,  the  revenue  which  has  been  wont  to  ac- 
crue from  its  importation  should  be  lessened,  an  indemnification  can  easily 
be  found,  either  out  of  the  manufacture  itself,  or  from  some  other  object 
which  may  be  deemed  more  convenient. 

The  measures,  however,  which  have  been  submitted,  taken  aggregately, 
will,  for  a  long  time  to  come,  rather  augment  than  decrease  the  public 
revenue. 

There  is  little  room  to  hope,  that  the  progress  of  manufactures  will  so 
equally  keep  pace  with  the  progress  of  population,  as  to  prevent  even  a 
gradual  augmentation  of  the  product  of  the  duties  on  imported  articles. 

As,  nevertheless,  an  abolition  in  some  instances,  and  a  reduction  in 
others,  of  duties  which  have  been  pledged  for  the  public  debt,  is  proposed, 
it  is  essential  that  it  should  be  accompanied  with  a  competent  substitute. 
In  order  to  this,  it  is  requisite  that  all  the  additional  duties  which  shall  be 
laid,  be  appropriated,  in  the  first  instance,  to  replace  all  defalcations  which 
may  proceed  from  any  such  abolition  or  diminution.  It  is  evident,  at  first 
glance,  that  they  will  not  only  be  adequate  to  this,  but  will  yield  a  consider- 
able surplus.     This  surplus  will  serve, 

First.  To  constitute  a  fund  for  paying  the  bounties  which  have  been  de- 
creed. 

Secondly.     To  constitute  a  fund  for  the  operations  of  a  board  to  be  esta- 
blished, for  promoting  arts,   agriculture,  manufactures,  and  commerce*     Of 
18 


12Q,  REPORTS  OF  THE  ["1791. 

this  institution,   different  intimations  have  been  given  in  the  course  of  this 
report.     An  outline  of  a  plan  for  it  shall  now  be  submitted. 

Let  a  certain  annual  sum  be  set  apart,  and  placed  under  the  management 
of  commissioners,  not  less  than  three,  to  consist  of  certain  officers  of  the 
government  and  their  successors  in  office. 

Let  these  commissioners  be  empowered  to  apply  the  fund  confided  to 
them,  to  defray  the  expenses  of  the  emigration  of  artists,  and  manufacturers 
in  particular  branches  of  extraordinary  importance — to  induce  the  prosecu- 
tion and  introduction  of  useful  discoveries,  inventions,  and  improvements, 
by  proportionate  rewards,  judiciously  held  out  and  applied — to  encourage 
by  premiums,  both  honorable  and  lucrative,  the  exertions  of  individuals  and  of 
classes,  in  relation  to  the  several  objects  they  are  charged  with  promoting — 
and  to  afford  such  other  aids  to  those  objects  as  may  be  generally  designated 
by  law. 

The  commissioners  to  render  to  the  Legislature  an  annual  account  of 
their  transactions  and  disbursements;  and  all  such  sums  as  shall  not  have 
been  applied  to  the  purposes  of  their  trust,  at  the  end  of  every  three  years, 
to  revert  to  the  treasury.  It  may  also  be  enjoined  upon  them  not  to  draw 
out  the  money,  but  for  the  purpose  of  some  specific  disbursement. 

It  may,  moreover,  be  of  use  to  authorize  them  to  receive  voluntary  con- 
tributions, making  it  their  duty  to  apply  them  to  the  particular  objects  for 
which  they  may  have  been  made,  if  any  shall  have  been  designated  by  the 
donors. 

There  is  reason  to  believe  that  the  progress  of  particular  manufactures 
has  been  much  retarded  by  the  want  of  skilful  workmen.  And  it  often 
happens,  that  the  capitals  employed  are  not  equal  to  the  purposes  of  bring- 
ing from  abroad  workmen  of  a  superior  kind.  Here,  in  cases  worthy  of  it, 
the  auxiliary  agency  of  government  would,  in  all  probability,  be  useful. 
There  are  also  valuable  workmen  in  every  branch  who  are  prevented  from 
emigrating  solely  by  the  want  of  means.  Occasional  aids  to  such  persons, 
properly  administered,  might  be  a  source  of  valuable  acquisitions  to  the 
country. 

The  propriety  of  stimulating  by  rewards  the  invention  and  introduction  of 
useful  improvements,  is  admitted  without  difficulty.  But  the  success  of  at- 
tempts in  this  way,  must  evidently  depend  much  on  the  manner  of  conducting 
them.  It  is  probable  that  the  placing  of  the  dispensation  of  those  rewards 
under  some  proper  discretionary  direction,  where  they  may  be  accompanied 
by  collateral  expedients,  will  serve  to  give  them  the  surest  efficacy.  It 
seems  impracticable  to  apportion,  by  general  rules,  specific  compensations 
for  discoveries  of  unknown  and  disproportionate  utility. 

The  great  use  which  may  be  made  of  a  fund  of  this  nature,  to  procure 
and  import  foreign  improvements,  is  particularly  obvious.  Among  these, 
the  article  of  machines  would  form  a  most  important  item. 

The  operation  and  utility  of  premiums  have  been  adverted  to,  together 
with  the  advantages  which  have  resulted  from  their  dispensation,  under  the 
direction  of  certain  public  and  private  societies.  Of  this,  some  experience 
has  been  had,  in  the  instance  of  the  Pennsylvania  Society  for  the  Promotion 
of  Manufactures  and  Useful  Arts;  but  the  funds  of  that  association  have  been 
too  contracted  to  produce  more  than  a  very  small  portion  of  the  good  to 
which  the  principles  of  it  would  have  led.  It  may  confidently  be  affirmed, 
that  there  is  scarcely  any  thing  which  has  been  devised,  better  calculated  to 
excite  a  general  spirit  of  improvement,  than  the  institutions  of  this  nature. 
They  are  truly  invaluable. 


1791.]  SECRETARY  OF  THE  TREASURY.  I33 

In  countries  where  there  is  great  private  wealth,  much  may  be  effected 
by  the  voluntary  contributions  of  patriotic  individuals;  but  in  a  community 
situated  like  that  of  the  United  States,  the  public  purse  must  supply  the 
deficiency  of  private  resource.  In  what  can  it  be  so  useful,  as  in  prompt- 
ing and  improving  the  efforts  of  industry? 

All  which  is  humbly  submitted. 

ALEXANDER  HAMILTON, 

Secretary  of  the  Treasury. 


ON  THE  ESTABLISHMENT  OF  A  MINT. 


In  the  House  of  Representatives  of  the  United  States. 

SATURDAY,  May  5,   1791. 

On  motion, 
Ordered,  That  the  report  of  the  Secretary  of  the  Treasury,  relatively  to 
the  establishment  of  a  Mint,  which  was  made  to  this  House  on  Friday,  the 
38th  ultimo,  be  sent  to  the  Senate  for  their  information. 

Extract  from  the  Journal. 

John  Beckley,  Clerk. 


The  Secretary  of  the  Treasury  having  attentively  considered  the  subject 
referred  to  him  by  the  order  of  the  House  of  Representatives,  of  the 
fifteenth  day  of  April  last,  relative  to  the  establishment  of  a  Mint, 
most  respectfully  submits  the  result  of  his  inquiries  and  reflections. 

A  plan  for  an  establishment  of  this  nature,  involves  a  great  variety  of 
considerations,  intricate,  nice,  and  important.  The  general  state  of  debtor 
and  creditor;  all  the  relations  and  consequences  of  price;  the  essential  inter- 
ests of  trade  and  industry;  the  value  of  all  property;  the  whole  income,  both 
of  the  State  and  of  individuals,  are  liable  to  be  sensibly  influenced,  benefi- 
cially or  otherwise,  by  the  judicious  or  injudicious  regulation  of  this  inter- 
esting object. 

It  is  one,  likewise,  not  more  necessary  than  difficult  to  be  rightly  adjust- 
ed; one  which  has  frequently  occupied  the  reflections  and  researches  of  politi- 
cians, without  having  harmonized  their  opinions  on  some  of  the  most  im- 
portant of  the  principles  which  enter  into  its  discussion.  Accordingly,  dif- 
ferent systems  continue  to  be  advocated,  and  the  systems  of  different  nations, 
.after  much  investigation,  continue  to  differ  from  each  other. 

But  if  a  right  adjustment  of  the  matter  be  truly  of  such  nicety  and  diffi- 
culty, a  question  naturally  arises,  whether  it  may  not  be  most  adviseable  to 
leave  things  in  this  respect,  in  the  state  in  which  they  are?  Why,  might  it 
be  asked,  since  they  have  so  long  proceeded  in  a  train  which  has  caused  no 
general  sensation  of  inconvenience,  should  alterations  be  attempted,  the  pre- 
cise effect  of  which  cannot  with  certainty  be  calculated? 


X34  REPORTS  OF  THE  [1791. 

The  answer  to  this  question  is  not  perplexing.  The  immense  disorder  which 
actually  reigns  in  so  delicate  and  important  a  concern,  and  the  still  greater 
disorder  which  is  every  moment  possible,  call  loudly  for  a  reform.  The 
dollar  originally  contemplated  in  the  money  transactions  of  this  country, 
by  successive  diminutions  of  its  weight  and  fineness,  has  sustained  a  depre- 
ciation of  five  per  cent,  and  yet  the  new  dollar  has  a  currency,  in  all  pay- 
ments in  place  of  the  old,  with  scarcely  any  attention  to  the  difference  be- 
tween them.  The  operation  of  this  in  depreciating  the  value  of  property, 
depending  upon  past  contracts;  and,  (as  far  as  inattention  to  the  alteration  in 
the  coin  may  be  supposed  to  leave  prices  stationary,)  of  all  other  property, 
is  apparent.  Nor  can  it  require  argument  to  prove,  that  a  nation  ought  not 
to  suffer  the  value  of  the  property  of  its  citizens  to  fluctuate  with  the  fluctua- 
tions of  a  foreign  mint,  and  to  change  with  the  changes  in  the  regulations  of 
a  foreign  sovereign.  This,  nevertheless,  is  the  condition  of  one  which, 
having  no  coins  of  its  own,  adopts  with  implicit  confidence  those  of  other 
countries. 

The  unequal  values  allowed  in  different  parts  of  the  Union  to  coins  of  the 
same  intrinsic  worth;  the  defective  species  of  them  which  embarrass  the 
circulation  of  some  of  the  States;  and  the  dissimilarity  in  their  several  moneys 
of  account,  are  inconveniences,  which,  if  not  to  be  ascribed  to  the  want  of 
a  national  coinage,  will  at  least  be  most  effectually  remedied  by  the  establish- 
ment of  one;  a  measure  that  will,  at  the  same  time,  give  additional  security 
against  impositions  by  counterfeit  as  well  as  by  base  currencies. 

It  was  with  great  reason,  therefore,  that  the  attention  of  Congress,  under 
the  late  confederation,  was  repeatedly  drawn  to  the  establishment  of  a  mint; 
and  it  is  with  equal  reason  that  the  subject  has  been  resumed,  now  that  the 
favorable  change  which  has  taken  place  in  the  situation  of  public  affairs,  ad- 
mits of  its  being  carried  into  execution. 

But,  though  the  difficulty  of  devising  a  proper  establishment  ought  not  to 
deter  from  undertaking  so  necessary  a  work,  yet  it  cannot  but  inspire  diffi- 
dence in  one,  whose  duty  it  is  made  to  propose  a  plan  for  the  purpose,  and 
may  perhaps  be  permitted  to  be  relied  upon  as  some  excuse  for  any  errors 
which  may  be  chargeable  upon  it,  or  for  any  deviations  from  sounder  princi- 
ples, which  may  have  been  suggested  by  others,  or  even  in  part  acted  upon 
by  the  former  government  of  the  United  States. 

In  order  to  a  right  judgment  of  what  ought  to  be  done,  the  following  par- 
ticulars require  to  be  discussed: 

1st.   What  ought  to  be  the  nature  of  the  money  unit  of  the  United  States? 
2d.   What  the  proportion  between  gold  and  silver,  if  coins  of  both  metals 
are  to  be  established?. 

3d.   What  the  proportion  and  composition  of  alloy  in  each  kind? 
4th.  Whether  the  expense  of  coinage  shall  be  defrayed  by  the  govern- 
ment, or  out  of  the  material  itself? 

5th.  What  shall  be  the  number,  denominations,  sizes,  and  devices  of  the 
coins? 

6th.  Whether  foreign  coins  shall  be  permitted  to  be  current  or  not;  if  the 
former,  at  what  rate,  and  for  what  period? 

A  pre-requisite  to  determining  with  propriety,  what  ought  to  be  the  mo- 
ney unit  of  the  United  States,  is  to  endeavor  to  form  as  accurate  an  idea  as 
the  nature  of  the  case  will  admit,  of  what  it  actualty  is.  The  pound,  though, 
of  yarious  value,  is  the  unit  in  the  money  of  account  of  all  the  States.  But 
it  is  not  equally  easy  to.  pronounce  what  is  to  be  considered  as  the  unit  in  the 


1791.1  SECRETARY  OF  THE  TREASURY.  135 

coins.  There  being  no  formal  regulation  on  the  point,  (the  resolutions  of 
Congress  of  the  6th  of  July,  1785,  and  8th  of  August,  1786,  having  never 
yet  been  carried  into  operation,)  it  can  only  be  inferred  from  usage  or  prac- 
tice. The  manner  of  adjusting  foreign  exchanges,  would  seem  to  indicate 
the  dollar  as  best  entitled  to  that  character.  In  these,  the  old  piaster  of 
Spain,  or  old  Seville  piece  of  eight  rials,  of  the  value  of  four  shillings  and 
six-pence  sterling,  is  evidently  contemplated.  The  computed  par  between 
Great  Britain  and  Pennsylvania,  will  serve  as  an  example.  According  to 
that,  one  hundred  pounds  sterling  is  equal  to  one  hundred  and  sixty-six 
pounds  and  two-thirds  of  a  pound,  Pennsylvania  currency;  which  corres- 
ponds with  the  proportion  between  4*.  6d.  sterling,  and  7s.  6d.  the  current 
value  of  the  dollar  in  that  State,  by  invariable  usage.  And,  as  far  as  the  in- 
formation of  the  Secretary  goes,  the  same  comparison  holds  in  the  other  States, 

But  this  circumstance  in  favor  of  the  dollar,  loses  much  of  its  weight  from 
two  considerations.  That  species  of  coin  has  never  had  any  settled  or  stand- 
ard value,  according  to  weight  or  fineness,  but  has  been  permitted  to  circu- 
late by  tale,  without  regard  to  either,  very  much  as  a  mere  money  of  conve- 
nience, while  gold  has  had  a  fixed  price  by  weight,  and  with  an  eye  to  its, 
fineness.  This  greater  stability  of  value  of  the  gold  coins,  is  an  argument 
of  force  for  regarding  the  money  unit  as  having  been  hitherto  virtually  at- 
tached to  gold,  rather  than  to  silver. 

Twenty-four  grains  and  six-eighths  of  a  grain  of  fine  gold,  have  corres- 
ponded with  the  nominal  value  of  the  dollar  in  the  several  States,  without 
regard  to  the  successive  diminutions  of  its  intrinsic  worth. 

But,  if  the  dollar  should,  notwithstanding,  be  supposed  to  have  the  best 
title  to  being  considered  as  the  present  unit  in  the  coins,  it  would  remain  to 
determine  what  kind  of  dollar  ought  to  be  understood;  or,  in  other  words, 
what  precise  quantity  of  fine  silver. 

The  old  piaster  of  Spain,  which  appears  to  have  regulated  our  foreign  ex- 
changes, weighed  17  dwt.  12  grains,  and  contained  386  grains  and  15  mites 
of  fine  silver.  But  this  piece  has  been  long  since  out  of  circulation.  The 
dollars  now  in  common  currency,  are  of  recent  date,  and  much  inferior  to 
that,  both  in  weight  and  fineness.  The  average  weight  of  them,  upon  dif- 
ferent trials,  in  large  masses,  has  been  found  to  be  17  dwt.  8  grains.  Their 
fineness  is  less  precisely  ascertained;  the  results  of  various  assays  made  by 
different  persons,  under  the  direction  of  the  late  Superintendent  of  the  Fi- 
nances, and  of  the  Secretary,  being  as  various  as  the  assays  themselves. 
The  difference  between  their  extremes  is  not  less  than  24  grains  in  a  dollar 
of  the  same  weight  and  age;  which  is  too  much  for  any  probable  differences 
in  the  pieces.  It  is  rather  to  be  presumed,  that  a  degree  of  inaccuracy  has 
been  occasioned  by  the  want  of  proper  apparatus,  and,  in  general,  of  prac- 
tice. The  experiment  which  appears  to  have  the  best  pretensions  to  exactness, 
would  make  the  new  dollar  to  contain  370  grains  and  933  thousandth  parts 
of  a  grain  of  pure  silver. 

According  to  an  authority  on  which  the  Secretary  places  reliance,  the 
standard  of  Spain  for  its  silver  coin  in  the  year  1761,  was  261  parts  fine, 
and  27  parts  alloy;  at  which  proportion,  a  dollar  of  17  dwt.  8  grains,  would 
consist  of  377  grains  of  fine  silver,  and  39  grains  of  alloy.  But  there  is  no 
question  that  this  standard  has  been  since  altered  considerably  for  the  worse: 
to  what  precise  point,  is  not  as  well  ascertained  as  could  be  wished;  but, 
from  a  computation  of  the  value  of  dollars  in  the  markets  both  of  Amster- 
dam and  London,  (a  criterion  which   cannot  materially  mislead,)  the  new 


136  REPORTS  OF  THE  [1791. 

dollar  appears  to  contain  about  368  grains  of  fine  silver,  and  that  which  im- 
mediately preceded  it,  about  374  grains. 

In  this  state  of  things  there  is  some  difficulty  in  defining  the  dollar,  which 
is  to  be  understood  as  constituting  the  present  money  unit,  on  the  supposi- 
tion of  its  being  most  applicable  to  that  species  of  coin.  The  old  Seville 
piece  of  386  grains  and  15  mites  fine,  comports  best  with  the  computations 
of  foreign  exchanges,  and  with  the  more  ancient  contracts  respecting  land- 
ed property;  but  far  the  greater  number  of  contracts  still  in  operation  con- 
cerning that  kind  of  property,  and  all  those  of  a  merely  personal  nature, 
now  in  force,  must  be  referred  to  a  dollar  of  a  different  kind.  The  actual 
dollar  at  the  time  of  contracting,  is  the  only  one  which  can  be  supposed  to 
have  been  intended;  and  it  has  been  seen,  that  as  long  ago  as  the  year  1761, 
there  had  been  a  material  degradation  of  the  standard.  And  even  in  regard 
to  the  more  ancient  contracts,  no  person  has  ever  had  any  idea  of  a  scruple 
about  receiving  the  dollar  of  the  day  as  a  full  equivalent  for  the  nominal 
sum  which  the  dollar  originally  imported. 

A  recurrence,  therefore,  to  the  ancient  dollar,  would  be  in  the  greatest 
number  of  cases  an  innovation  in  fact,  and  in  all,  an  innovation  in  respect 
to  opinion.  The  actual  dollar  in  common  circulation,  has  evidently  a  much 
better  claim  to  be  regarded  as  the  actual  money  unit. 

The  mean  intrinsic  value  of  the  different  kinds  of  known  dollars,  hag 
been  intimated  as  affording  the  proper  criterion.  But,  when  it  is  recollect- 
ed that  the  more  ancient  and  more  valuable  ones  are  not  now  to  be  met  with 
at  all  in  circulation,  and  that  the  mass  of  those  generally  current,  is  compos- 
ed of  the  newest  and  most  inferior  kinds,  it  will  be  perceived,  that  even  an 
equation  of  that  nature,  would  be  a  considerable  innovation  upon  the  real 
present  state  of  things;  which  it  will  certainly  be  prudent  to  approach,  as 
far  as  may  be  consistent  with  the  permanent  order  designed  to  be  introduced. 

An  additional  reason  for  considering  the  prevailing  dollar  as  the  standard 
of  the  present  money  unit,  rather  than  the  ancient  one,  is,  that  it  will  not 
only  be  conformable  to  the  true  existing  proportion  between  the  two  metals 
in  this  country,  but  will  be  more  conformable  to  that  which  obtains  in  the 
commercial  world  generally. 

The  difference  established  by  custom  in  the  United  States  between  coined 
gold  and  coined  silver,  has  been  stated  upon  another  occasion,  to  be  nearly 
as  1  to  15.6.  This,  if  truly  the  case,  would  imply  that  gold  was  extreme- 
ly overvalued  in  the  United  States:  for  the  highest  actual  proportion  in 
any  part  of  Europe,  very  little,  if  at  all,  exceeds  1  to  15;  and  the  average 
proportion  throughout  Europe,  is  probably  not  more  than  about  one  to 
14.8.  But  that  statement  has  proceeded  upon  the  idea  of  the  ancient  dol- 
lar. One  pennyweight  of  gold  of  twenty-two  carats  fine,  at  6s.  8d.,  and 
the  old  Seville  piece  of  386  grains  and  15  mites  of  pure  silver,  at  7s.  6d.} 
furnish  the  exact  ratio  of  1  to  15.6262.  But  this  does  not  coincide  with 
the  real  difference  between  the  metals  in  our  market,  or,  which  is  with  us 
the  same  thing,  in  our  currency.  To  determine  this,  the  quantity  of  fine 
silver  in  the  general  mass  of  the  dollars  now  in  circulation,  must  afford 
the  rule.  Taking  the  rate  of  the  late  dollar  of  374  grains,  the  proportion 
would  be  as  1  to  15.11.  Taking  the  rate  of  the  newest  dollar,  the  propor- 
tion would  then  be  as  1  to  14.87.  The  mean  of  the  two  would  give  the 
proportion  of  1  to  15  very  nearly;  less  than  the  legal  proportion  in  the 
coins  of  Great  Britain,  which  is  as  1  to  15.2;  but  somewhat  more  than  the 
actual  or  market  proportion,  which  is  not  quite  1  to  15. 


1791.]  SECRETARY  OF  THE  TREASURY.  137 

The  preceding  view  of  the  subject  does  not  indeed  afford  a  precise  or 
certain  definition  of  the  present  unit  in  the  coins,  but  it  furnishes  data 
which  will  serve  as  guides  in  the  progress  of  fhe  investigation.  It  ascer- 
tains, at  least,  that  the  sum  in  the  money  of  account  of  each  State  corres- 
ponding with  the  nominal  value  of  the  dollar  in  such  State,  corresponds  also 
with  24  grains  and  f  of  a  grain,  of  fine  gold;  and  with  something  between 
368  and  374  grains  of  fine  silver. 

The  next  inquiry  towards  a  right  determination  of  what  ought  to  be  the 
future  money  unit  of  the  United  States,  turns  upon  these  questions:  Whether 
it  ought  to  be  peculiarly  attached  to  either  of  the  metals,  in  preference  to 
the  other,  or  not;  and,  if  to  either,  to  which  of  them? 

The  suggestions  and  proceedings  hitherto  have  had  for  their  object,  the  an- 
nexing of  it  emphatically  to  the  silver  dollar.  A  resolution  of  Congress  of 
the  6th  of -July,  1785,  declares  that  the  money  unit  of  the  United  States 
shall  be  a  dollar;  and  another  resolution  of  the  8th  of  August  1786,  fixes 
that  dollar  at  375  grains  and  64  hundredths  of  a  grain  of  fine  silver.  The 
same  resolution,  however,  determines,  that  there  shall  also  be  two  gold  coins, 
one  of  246  grains  and  268  parts  of  a  grain  of  pure  gold,  equal  to  ten  dollars, 
and  the  other  of  half  that  quantity  of  pure  gold,  equal  to  five  dollars:  And 
it  is  not  explained,  whether  either  of  the  two  species  of  coins,  of  gold  or 
silver,  shall  have  any  greater  legality  in  payments,  than  the  other.  Yet  it 
would  seem  that  a  preference  in  this  particular  is  necessary  to  execute  the 
idea  of  attaching  the  unit  exclusively  to  one  kind.  .  If  each  of  them  be  as 
valid  as  the  other,  in  payments  to  any  amount,  it  is  not  obvious  in  what 
effectual  sense  either  of  them  can  be  deemed  the  money  unit,  rather  than 
the  other. 

If  the  general  declaration,  that  the  dollar  shall  be  the  money  unit  of  the 
United  States,  could  be  understood  to  give  it  a  superior  legality  inpayments, 
the  institution  of  coins  of  gold,  and  the  declaration  that  each  of  them  shall 
be  equal  to  a  certain  number  of  dollars,  would  appear  to  destroy  that  in- 
terference.: And  the  circumstance  of  making  the  dollar  the  unit  in  the  mo- 
ney of  account,  seems  to  be  rather  matter  of  form  than  of  substance. 

Contrary  to  the  ideas  which  have  heretofore  prevailed,  in  the  suggestions 
concerning  a  coinage  for  the  United  States,  though  not  without  much  hesi- 
tation, arising  from  a  deference  for  those  ideas,  the  Secretary  is,  upon  the 
whole,  strongly  inclined  to  the  opinion,  that  a  preference  ought  to  be  given 
to  neither  of  the  metals  for  the  money  unit.  Perhaps  if  either  were  to  be 
preferred,  it  ought  to  be  gold  rather  than  silver. 

The  reasons  are  these — 

The  inducement  to  such  a  preference  is  to  render  the  unit  as  little  variable 
as  possible;  because  on  this  depends  the  steady  value  of  all  contracts,  and,  in 
a  certain  sense,  of  all  other  property.  And  it  is  truly  observed,  that  if  the 
unit  belong  indiscriminately  to  both  the  metals,  it  is  subject  to  all  the  fluctu- 
ations that  happen  in  the  relative  value  which  they  bear  to  each  other. 
But  the  same  reason  would  lead  to  annexing  it  to  that  particular  one,  which 
is  itself  the  least  liable  to  variation;  if  there  be,  in  this  respect,  any  discern- 
able  difference  between  the  two. 

Gold  may,  perhaps,  in  certain  senses,  be  said  to  have  greater  stability  than 
silver:  as,  being  of  superior  value,  less  liberties  have  been  taken  with  it,  in 
the  regulations  of  different  countries.  Its  standard  has  remained  more  uni- 
form, and  it  has  in  other  respects  undergone  fewer  changes:  a?,  being  not  so 
much  an  article  of  merchandise,  owing  to  the  use  made  of  silver  in  the  trade 


138  REPORTS  OF  THE  [1791, 

with  the  East  Indies  and  China,  it  is  less  liable  to  be  influenced  by  circum- 
stances of  commercial  demand.  And  if,  reasoning  by  analogy,  it  could  be 
affirmed,  that  there  is  a  physical  probability  of  greater  proportional  increase 
in  the  quantity  of  silver  than  in  that  of  gold,  it  would  afford  an  additional  rea- 
son for  calculating  on  greater  steadiness  in  the  value  of  the  latter. 

As  long  as  gold,  either  from  its  intrinsic  superiority  as  a  metal,  from 
its  greater  rarity,  or  from  the  prejudices  of  mankind,  retains  so  considera- 
ble a  pre-eminence  in  value  over  silver,  as  it  has  hitherto  had,  a  natural  con- 
sequence of  this  seems  to  be  that  its  condition  will  be  more  stationary.  The 
revolutions,  therefore,  which  may  take  place  in  the  comparative  value  of 
gold  and  silver,  will  be  changes  in  the  state  of  the  latter,  rather  than  in  that 
of  the  former. 

If  there  should  be  an  appearance  of  too  much  abstraction  in  any  of  these 
ideas,  it  may  be  remarked,  that  the  first  and  most  simple  impressions  do  not 
naturally  incline  to  giving  a  preference  to  the  inferior  or  least  valuable  of  the 
two  metals. 

It  is  sometimes  observed,  that  silver  ought  to  be  encouraged  rather  than 
gold,  as  being  more  conducive  to  the  extension  of  bank  circulation,  from  the 
greater  difficulty  and  inconvenience  which  its  greater  bulk,  compared  with 
its  value,  occasions  in  the  transportation  of  it.  But  bank  circulation  is  de- 
sirable, rather  as  an  auxiliary  to,  than  as  a  substitute  for  that  of  the  pre- 
cious metals,  and  ought  to  be  left  to  its  natural  course.  Artificial  expedients 
to  extend  it,  by  opposing  obstacles  to  the  other,  are  at  least  not  recommend- 
ed by  any  very  obvious  advantages.  And,  in  general,  it  is  the  safest  rule  to 
regulate  every  particular  institution  or  object,  according  to  the  principles 
which,  in  relation  to  itself,  appear  the  most  sound.  In  addition  to  this,  it 
may  be  observed,  that  the  inconvenience  of  transporting  either  of  the  metals, 
is  sufficiently  great  to  induce  a  preference  of  bank  paper,  whenever  it  can  be 
made  to  answer  the  purpose  equally  well. 

But,  upon  the  whole,  it  seems  to  be  most  adviseable,  as  has  been  observ- 
ed, not  to  attach  the  unit  exclusively  to  either  of  the  metals;  because  this 
cannot  be  done  effectually,  without  destroying  the  office  and  character  of  one 
of  them  as  money,  and  reducing  it  to  the  situation  of  a  mere  merchandise; 
which,  accordingly,  at  different  times,  has  been  proposed  from  different  and 
very  respectable  quarters;  but  which  would  probably  be  a  greater  evil  than 
occasional  variations  in  the  unit,  from  the  fluctuations  in  the  relative  value 
of  the  metals;  especially  if  care  be  taken  to  regulate  the  proportion  between 
them,  with  an  eye  to  their  average  commercial  value. 

To  annul  the  use  of  either  of  the  metals,  as  money,  is  to  abridge  the  quan- 
tity of  circulating  medium;  and  is  liable  to  all  the  objections  which  arise  from 
a  comparison  of  the  benefits  of  a  full,  with  the  evils  of  a  scanty  circulation. 

It  is  not  a  satisfactory  answer  to  say,  that  none  but  the  favored  metal 
would  in  this  case  find  its  way  into  the  country,  as  in  that  all  balances  must 
be  paid.  The  practicability  of  this  would,  in  some  measure,  depend  on  the 
abundance  or  scarcity  of  it  in  the  country  paying.  Where  there  was  but 
little,  it  either  would  not  be  procurable  at  all,  or  it  would  cost  a  premium  to 
obtain  it;  which,  in  every  case  of  a  competition  with  others,  in  a  branch  of 
trade,  would  constitute  a  deduction  from  the  profits  of  the  party  receiving. 
Perhaps,  too,  the  embarrassments  which  such  a  circumstance  might  some- 
times create,  in  the  pecuniary  liquidation  of  balances,  might  lead  to  addition- 
al efforts  to  find  a  substitute  in  commodities,  and  might  so  fir  impede  the  in- 
troduction of  the  metals.     Neither  could  the  exclusion  of  either  of  them  be 


1791.]  SECRETARY  OF  THE  TREASURY.  I39 

deemed,  in  other  respects,  favorable  to  commerce.  It  is  often  in  the  course 
of  trade  as  desirable  to  possess  the  kind  of  money,  as  the  kind  of  commod- 
ities best  adapted  to  a  foreign  market. 

It  seems,  however,  most  probable,  that  the  chief,  if  not  the  sole  effect  of 
such  a  regulation,  would  be  to  diminish  the  utility  of  one  of  the  metals.  It 
could  hardly  prove  an  obstacle  to  the  introduction  of  that  which  was  excluded 
in  the  natural  course  of  trade;  because  it  would  always  command  a  ready 
sale  for  the  purpose  of  exportation  to  foreign  markets.  But  such  an  effect, 
if  the  only  one,  is  not  to  be  regarded  as  a  trival  inconvenience. 

If  then  the  unit  ought  not  to  be  attached  exclusively  to  either  of  the  metals, 
the  proportion  which  ought  to  subsist  between  them,  in  the  coins,  becomes 
a  preliminary  inquiry,  in  order  to  its  proper  adjustment.  This  proportion  ap- 
pears to  be,  in  several  views,  of  no  inconsiderable  moment. 

One  consequence  of  overvaluing  either  metal,  in  respect  to  the  other,  is 
the  banishment  of  that  which  is  undervalued.  If  two  countries  are  supposed, 
in  one  of  which  the  proportion  of  gold  to  silver  is  as  1  to  16,  in  the  other 
as  1  to  15,  gold  being  worth  more,,  silver  less,  in  one  than  in  the  other,  it  is 
manifest,  that  in  their  reciprocal  payments,  each  will  select  that  species  which 
it  values  least,  to  pay  to  the  other,  where  it  is  valued  most.  Besides  this, 
the  dealers  in  money  will,  from  the  same  cause,  often  find  a  profitable  traffic 
in  an  exchange  of  the  metals  between  the  two  countries.  And  hence  it 
would  come  to  pass,  if  other  things  were  equal,  that  the  greatest  part  of  the 
gold  would  be  collected  in  one,  and  the  greatest  part  of  the  silver  in  the  other. 
The  course  ©f  trade  might  in  some  degree  counteract  the  tendency  of  the 
difference  in  the  legal  proportions,  by  the  market  value;  but  this  is  so  far  and 
so  often  influenced  by  the  legal  rates,  that  it  does  not  prevent  their  producing 
the  effect  which  is  inferred.  Facts,  too,  verify  the  inference.  In  Spain  and 
■England  where  gold  is  rated  higher  than  in  other  parts  of  Europe,  there  is  a 
scarcity  of  silver;  while  it  is  found  to  abound  in  France  and  Holland,  where 
-it  is  rated  higher  in  proportion  to  gold,  than  in  the  neighboring  nations. 
And  it  is  continually  flowing  from  Europe  to  China  and  the  East  Indies, 
owing  to  the  comparative  cheapness  of  it  in  the  former,  and  dearness  of  it 
in  the  latter. 

This  consequence  is  deemed  by  some  not  very  material;  and  there  are 
even  persons,  who,  from  a  fanciful  predilection  to  gold,  are  willing  to  invite 
it,  even  by  a  higher  price.  But  general  utility  will  best  be  promoted  by  a 
due  proportion  of  both  metals.  If  gold  be  most  convenient  in  large  pay- 
ments, silver  is  best  adapted  to  the  more  minute  and  ordinary  circulation. 

But  it  is  to  be  suspected,  that  there  is  another  consequence  more  serious 
than  the  one  which  has  been  mentioned.  This  is  the  diminution  of  the  to- 
tal quantity  of  specie  which  a  country  would  naturally  possess. 

It  is  evident,  that  as  often  as  a  country,  which  overrates  either  of  the 
metals,  receives  a  payment  in  that  metal,  it  gets  a  less  .actual  quantity  than 
it  ought  to  do,  or  than  it  would  do  if  the  rate  were  a  just  one. 

It  is  also  equally  evident,  that  there  will  be  a  continual  effort  to  make  pay- 
ment to  it  in  that  species,  to  which  it  has  annexed  an  exaggerated  estimation, 
wherever  it  is  current  at  a  less  proportional  value.  And  it  would  seem  to 
be  a  very  natural  effect  of  these  two  causes,  not  only  that  the  mass  of  the  pre- 
cious metals  in  the  country  in  question,  would  consist  chiefly  of  that  kind,  to 
which  it  had  given  an  extraordinary  value,  but  that  it  would  be  absolutely 
less  than  if  they  had  been  duly  proportioned  to  each  other. 

A  conclusion  of  this  sort,  however,  is  to  be  drawn  with  great  caution.     In 
19 


140  REPORTS  OF  THE  [1791. 

such  matters,  there  are  always  some  local  and  many  other  particular  circum- 
stances, which  qualify  and  vary  the  operation  of  general  principles,  even 
where  they  are  just;  and  there  are  endless  combinations,  very  difficult  to  be 
analyzed,  which  often  render  principles,  that  have  the  most  plausible  pre- 
tensions, unsound  and  delusive. 

There  ought,  for  instance,  according  to  those  which  have  been  stated,  to 
have  been  formerly  a  greater  quantity  of  gold  in  proportion  to  silver  in  the 
United  States,  than  there  has  been;  because  the  actual  value  of  gold  in  this 
country,  compared  with  silver,  was  perhaps  higher  than  in  any  other.  But 
our  situation  in  regard  to  the  West  India  islands,  into  some  of  which  there 
is  a  large  influx  of  silver  directly  from  the  mines  of  South  America,  occa- 
sions an  extraordinary  supply  of  that  metal,  and  consequently  a  greater  pro- 
portion of  it  in  our  circulation  than  might  have  been  expected  from  its  rela- 
tive value. 

What  influence  the  proportion  under  consideration  may  have  upon  the 
state  of  prices,  and  how  far  this  may  counteract  its  tendency  to  increase  or 
lessen  the  quantity  of  the  metals,  are  points  not  easy  to  be  developed;  and 
yet  they  are  very  necessary  to  an  accurate  judgment  of  the  true  operation  of 
the  thing. 

But  however  impossible  it  may  be  to  pronounce  with  certainty,  that  the 
possession  of  a  less  quantity  of  specie  is  a  consequence  of  overvaluing  either 
of  the  metals,  there  is  enough  of  probability  in  the  considerations  which 
seem  to  indicate  it,  to  form  an  argument  of  weight  against  such  overvaluation. 

A  third  ill  consequence  resulting  from  it  is,  a  greater  and  more  frequent 
disturbance  of  the  state  of  the  money  unit,  by  a  greater  and  more  frequent 
diversity  between  the  legal  and  market  proportions  of  the  metals.  This  has 
not  hitherto  been  experienced  in  the  United  States,  but  it  has  been  experi- 
enced elsewhere;  and  from  its  not  having  been  felt  by  us  hitherto,  it  does  not 
follow  that  this  will  not  be  the  case  hereafter,  when  our  commerce  shall 
have  attained  a  maturity,  which  will  place  it  under  the  influence  of  more 
fixed  principles. 

In  establishing  a  proportion  between  the  metals,  there  seems  to  be  an 
option  of  one  of  two  things — 

To  approach,  as  nearly  as  it  can  be  ascertained,  the  mean  or  average  pro- 
portion, in  what  may  be  called  the  commercial  world;  or, 

To  retain  that  which  now  exists  in  the  United  States.  As  far  as  these 
happen  to  coincide,  they  will  render  the  course  to  be  pursued  more  plain 
and  more  certain. 

To  ascertain  the  first,  with  precision,  would  require  better  materials  than 
are  possessed,  or  than  could  be  obtained,  without  an  inconvenient  delay. 

Sir  Isaac  Newton,  in  a  representation  to  the  Treasury  of  Great  Britain,  in 
the  year  1717,  after  stating  the  particular  proportions  in  the  different  coun- 
tries of  Europe,  concludes  thus: — "  By  the  course  of  trade  and  exchange 
between  nation  and  nation,  in  all  Europe,  fine  gold  is  to  fine  silver  as  14|, 
or  15  to  1." 

But  however  accurate  and  decisive  this  authority  may  be  deemed,  in 
relation  to  the  period  to  which  it  applies,  it  cannot  be  taken,  at  the  distance 
of  more  than  seventy  years,  as  a  rule  for  determining  the  existing  proportion. 
Alterations  have  been  since  made  in  the  regulations  of  their  coins  by 
several  nations;  which,  as  well  as  the  course  of  trade,  have  an  influence  up- 
on the  market  values.  Nevertheless,  there  is  reason  to  believe,  that  the 
state  of  the  matter,  as  represented  by  Sir  Isaac  Newton,  is  not  very  remote 
from  its  actual  state. 


1791.]  SECRETARY  OF  THE  TREASURY.  141 

In  Holland,  the  greatest  money  market  of  Europe,  gold  was  to  silver  in 
December,  1789,  as  1  to  14.88;  and  in  that  of  London  it  has  been,  for  some 
time  past,  but  little  different,  approaching  perhaps  something  nearer  1  to  15. 

It  has  been  seen  that  the  existing  proportion  between  the  two  metals  in 
this  country,  is  about  as  1  to  15. 

It  is  fortunate,  in  this  respect,  that  the  innovations  of  the  Spanish  mint 
have  imperceptibly  introduced  a  proportion  so  analogous  as  (his  is,  to  that 
which  prevails  among  the  principal  commercial  nations;  as  it  greatly  facili- 
tates a  proper  regulation  of  the  matter. 

This  proportion  of  1  to  15  is  recommended  by  the  particular  situation  of 
our  trade,  as  being  very  nearly  that  which  obtains  in  the  market  of  Great 
Britain,  to  which  nation  our  specie  is  principally  exported.  A  lower  rate 
for  either  of  the  metals,  in  our  market,  than  in  hers,  might  not  only  afford 
a  motive  the  more  in  certain  cases  to  remit  in  specie  rather  than  in  commodi- 
ties; but  it  might,  in  some  others,  cause  us  to  pay  a  greater,  quantity  of  it  for 
a  given  sum,  than  we  should  otherwise  do.  If  the  effect  should  rather  be  to 
occasion  a  premium  to  be  given  for  the  metal  which  was  under-rated,  this 
would  obviate  those  disadvantages;  but  it  would  involve  another,  a  customa- 
ry difference  between  the  market  and  legal  proportions,  which  would  amount 
to  a  species  of  disorder  in  the  national  coinage. 

Looking  forward  to  the  payments  of  interest  hereafter  to  be  made  to  Hol- 
land, the  same  proportion  does  not  appear  ineligible.  The  present  legal 
proportion  in  the  coins  of  Holland  is  stated  at  1  to  14-^.  That  of  the  mar- 
ket varies  somewhat  at  different  times,  but  seldom  very  widely  from  this 
point. 

There  can  hardly  be  a  better  rule  in  any  country,  for  the  legal,  than  the 
market  proportion;  if  this  can  be  supposed  to  have  been  produced  by  the  iree 
and  steady  course  of  commercial  principles.  The  presumption,  in  such 
case,  is,  that  each  metal  finds  its  true  level,  according  to  its  intrinsic  utility, 
in  the  general  system  of  money  operations. 

But  it  must  be  admitted,  that  this  argument  in  favor  of  continuing  the  ex- 
isting proportion,  is  not  applicable  to  the  state  of  the  coins  with  us.  There 
have  been  too  many  artificial  and  heterogeneous  ingredients,  too  much  want 
of  order  in  the  pecuniary  transactions  of  this  country,  to  authorize  the  attri- 
buting the  effects  which  have  appeared  to  the  regular  operations  of  com- 
merce. A  proof  of  this  is  to  be  drawn  from  the  alterations  which  have  hap- 
pened in  the  proportion  between  the  metals  merely  by  the  successive  de- 
gradations of  the  dollar,  in  consequence  of  the  mutability  of  a  foreign  mint. 
The  value  of  gold  to  silver  appears  to  have  declined  wholly  from  this  cause, 
from  15^  to  about  15  to  1.  Yet  as  this  last  proportion,  however  pro- 
duced, coincides  so  nearly  with  what  may  be  deemed  the  commercial  ave- 
rage, it  may  be  supposed  to  furnish  as  good  a  rule  as  can  be  pursued. 

The  only  question  seems  to  be,  whether  the  value  of  gold  ought  not  to  be 
a  little  lowered  to  bring  it  to  a  more  exact  level  with  the  two  markets  which 
have  been  mentioned.  But  as  the  ratio  of  1  to  15  is  so  nearly  conformable 
to  the  state  of  those  markets,  and  best  agrees  with  that  of  our  own,  it  will 
probably  be  found  the  most  eligible.  If  the  market  of  Spain  continues  to 
give  a  higher  value  to  gold  (as  it  has  done  in  time  past,)  than  that  which  is 
recommended,  there  may  be  some  advantage  in  a  middle  station. 

A  further  preliminary  to  the  adjustment  of  the  future  money  unit,  is,  to 
determine  what  shall  be  tiie  proportion  and  composition  of  alloy  in  each  spe- 
eies  of  the  coins. 


J42  REPORTS  OF  THE  [1791. 

The  first,  by  the  resolution  of  the  Sth  of  August,  1786,  before  referred  to, 
is  regulated  at  one-twelfth,  or  in  other  words,  at  1  part  alloy  to  11  parts  fine;, 
whether  gold  or  silver;  which  appears  to  be  a  convenient  rule;  unless  there 
should  be  some  collateral  consideration  which  may  dictate  a  departure  from 
it.  Its  correspondency,  in  regard  to  both  metal's,  is  a  recommendation  of  it, 
because  a  difference  could  answer  no  purpose  of  pecuniary  or  commercial 
utility,  and  uniformity  is  favorable  to  order. 

This  ratio-,  as  it  regards  gold,  coincides  with  the  proportion,  real  or  pro- 
fessed, in  the  coins  of  Portugal,  England,  France  and  Spain.  In  those  of 
the  two'  former,-  it  is  real;  in  those  of  the  two  latter,  there  is  a  deduction  for 
what  is  called  remedy  of  weight  and  alloy,  which  is  in  the  nature  of  an 
allowance  to  the  master  of  the  mint  for  errors  and  imperfections  in  the  pro- 
cess; rendering,  the  coin  either  lighter  or  baser  than  it  ought  to  be.  The 
same  thing  is  known  in  the  theory  of  the  English  mint,  where  i  of  a  carat 
is  allowed.  But  the  difference  seems  to  be,  that  there,  it  is  merely  an  occa- 
sional indemnity  within  a  certain  limit,  for  real  and  unavoidable  errors  and 
imperfections;  whereas,  in  the  practice  of  the  mints  of  France  and  Spain,  it 
appears  to  amount  to  a  stated  and  regular  deviation  from  the  nominal  stand- 
ard. Accordingly,  the  real  standards  of  France  and  Spain  are  something 
worse  than  22  carats,  or  1 1  parts  in  12  fine. 

The  principal  gold  coins  in  Germany,  Holland,  Sweden,  Denmark,  Po- 
land, and  Italy,  are  finer  than  those  of  England  and  Portugal,  in  different 
degrees,  from  1  carat  and  1  to  1  carat  and  |,  which  last  is  within  -|  of  a  carat 
of  pure  gold. 

There  are  similar  diversities  in  the  standards  of  the  silver  coins  of  the 
different  countries  of  Europe.  That  of  Great  Britain  is  222  parts  fine,  to 
18  alio}';  those  of  the  other  European  nations  vary  from  that  of  Great  Bri- 
tain as  widely  as  from  about  17  of  the  same  parts  better,  to  75  worse. 

The  principal  reasons  assigned  for  the  use  of  alloy,  are  the  saving  of  ex- 
pense in  the  refining  of  the  metals,  (which  in  their  natural  state  are  usually 
mixed  with  a  portion  of  the  coarser  kinds,)  and  the  rendering  of  them  har- 
der as  a  security  against  too  great  waste  by  friction  or  wearing.  The  first 
reason,  drawn  from  the  original  composition  of  the  metals,  is  strengthened 
at  present  by  the  practice  of  alloying  their  coins,  which  has  obtained  among 
so' many  nations.  The  reality  of  the  effect  to  which  the  last  reason  is  ap- 
plicable, has  been  denied,  and  experience  has  been  appealed  to  as  proving 
that  the  more  alloyed  coins  wear  faster  than  the  purer.  The  true  state  of  this 
matter  may  be  worthy  of  future  investigation,  though  first  appearances  are  in 
favor  of  alloy.  In  the  mean  time,  the  saving  of  trouble  and  expense  are 
sufficient  inducements  to  following  those  examples  which  suppose  its  expedi- 
ency. And  the  same  considerations  lead  to  taking  as  our  models  those  na- 
tions with  whom  we  have  most  intercourse,  and  whose  coins  are  most  pre- 
valent in  our  circulation.  These  are  Spain,  Portugal,  England,  and  France. 
The  relation  which  the  proposed  proportion  bears  to  their  gold  coins,  has 
been  explained.  In  respect  to  their  silver  coins,  it  will  not  be  very  remote 
from  the  mean  of  their,  several  standards. 

The  component  ingredients  of  the  alloy  in  each  metal,  will  also  require  to 
be  regulated.  In  silver,  copper  is  the  only  kind  in  use,  and  it  is  doubtless 
the  only  proper  one.  In  gold,  there  is  a  mixture  of  silver  and  copper;  in 
the  English  coins  consisting  of  equal  parts,  in  the  coins  of  some  other  coun- 
tries varying  from  \  to  -|  silver. 

The  reason  of  this  union  of  silver  with  copper  is  this — The  silver  coun- 


1791.]  SECRETARY  OF  THE  TREASURY.  14$ 

teracts  the  tendency  of  the  copper  to  injure  the  color  or  beauty  of  the  coin, 
by  giving  it  100  much  redness,  or  rather  a  coppery  hue,  which  a  small  quan- 
tity vvili  produce ;  and  the  copper  prevents  the  too  great  whiteness  which 
silver  alone  would  confer  It  is  apprehended,  that  there  are  considerations 
which  may  render  it  prudent  to  establish,  by  law,  that  the  proportion  of  sil- 
ver to  copper  in  the  gold  coins  of  the  United  States  shall  not  be  more  than 
i,  nor  less  than  $;  .vesting  a  discretion  in  some  proper  place  to  regulate  the 
matter  within  those  limits,  as  experience  in  the  execution  may  recommend. 

A  third  point  remains  to  be  discussed,  as  a  pre-requisite  to  the  determina- 
tion of  the  money  unit,  which  is,  whether  the  expense  of  coining  shall  be 
defrayed  by  the  public,  or  out  of  the  material  itself;  or,  as  it  is  sometimes 
stated,  whether  coinage  shall  be  free,  or  shall  be  subject  to  a  duty  or  imposi- 
tion? This  forms,  perhaps,  one  of  the  nicest  questions  in  the  doctrine  of 
money. 

The  practice  of  different  nations  is  dissimilar  in  this  particular.  In  Eng- 
land, coinage  is  said  to  be  entirely  free:  the  mint  price  of  the  metals  in  bul- 
lion, being  the  same  with  the  value  of  them  in  coin.  In  France,  there  is  a 
duty,  which  has  been,  if  it  is  not  now,  eight  percent.  In  Holland,  there  is 
a  difference  between  the  mint  price  and  the  value  in  the  coins,  which  has 
been  computed  at  .96,  or  something  less  than  one  per  cent,  upon  gold;  at 
1.48,  or  something  less  than  one  and  a  half  per  cent,  upon  silver.  The  re- 
solution of  the  8th  of  August,  1786,  proceeds  upon  the  idea  of  a  deduction 
of  half  per  cent,  from  gold,  and  of  two  per  cent,  from  silver,  as  an  indem- 
nification for  the  expense  of  coining.  This  is  inferred  from  a  report  of  the 
late  Board  of  Treasury,  upon  which  that  resolution  appears  to  have  been 
founded. 

Upon  the  supposition  that  the  expense  of  coinage  ought  to  be  defrayed 
out  of  the  metals,  there  are  two  ways  in  which  it  may  be  effected;  one  by  a 
reduction  of  the  quantity  of  fine  gold  and  silver  in  the  coins,  the  other  by 
establishing  a  diiference  between  the  value  of  those  metals  in  the  coins,  and 
the  mint  price  of  them  in  bullion. 

The  first  method  appears  to  the  Secretary  inadmissible.  He  is  unable  to 
distinguish  an  operation  of  this  sort,  from  that  of  raisingthe  denomination  of 
the  coin;  a  measure  which  has  been  disapproved  by  the  wisest  men  of  the 
nations  in  which  it  has  been  practised,  and  condemned  by  the  rest  of  the 
world.  To  declare  that  a  less  weight  of  gold  or  silver  shall  pass  for  the  same 
sum,  which  before  represented  a  greater  weight;  or  to  ordain  that  the  same 
weight  shall  pass  for  a  greater  sum,  are  things  substantially  of  one  nature. 
The  consequence  of  either  of  them,  if  the  change  can  be  realized,  is  to  de- 
grade the  money  unit;  obliging  creditors  to  receive  less  than  their  just  dues, 
and  depreciating  property  of  every  kind.  For  it  is  manifest,  that  every 
thing  would,  in  this  case,  be  represented  by  a  less  quantity  of  gold  and  silver 
than  before. 

It  is  sometimes  observed  on  this  head,  that  though  any  article  of  property 
might,  in  fact,  be  represented  by  a  less  actual  quantity  of  pure  metal,  it  would 
nevertheless  be  represented  by  something  of  the  same  infrinsic  value.  EI  very 
fabric,  it  is  remarked,  is  worth  intrinsically  the  price  of  the  raw  material  and 
the  expense  of  fabrication;  a  truth  not  less  applicable  to  a  piece  of  coin  than 
to  a  yard  of  cloth. 

This  position,  well  founded  in  itself,  is  here  misapplied.  It  supposes, 
that  the  coins  now  in  circulation  are  to  be  considered  as  bullion,  or,  in  other 
words,  as  a  raw  material.     But  the  fact  is,  that  the   adoption  of  them   a& 


144  REPORTS  OF  THE  [1791. 

money,  has  caused  them  to  become  the  fabric;  it  has  invested  them  with  the 
character  and  office  of  coins,  and  has  given  them  a  sanction  and  efficacy, 
equivalent  to  that  of  the  stamp  of  the  sovereign.  The  prices  of  all  our 
commodities,  at  home  and  abroad,  and  of  all  foreign  commodities  in  our 
^narkets,  have  found  their  level  in  conformity  to  this  principle.  The  foreign 
coins  may  be  divested  of  the  privilege  they  have  hitherto  been  permitted  to 
enjoy,  and  may  of  course  be  left  to  find  their  value  in  the  market  as  a  raw 
material.  But  the  quantity  of  gold  and  silver  in  the  national  coins,  corres- 
ponding with  a  given  sum,  cannot  be  made  less  than  heretofore,  without 
disturbing  the  balance  of  intrinsic  value,  and  making  every  acre  of  land, 
as  well  as  every  bushel  of  wheat,  of  less  actual  worth  than  in  time  past.  If 
the  United  States  were  isolated,  and  cut  off  from  all  intercourse  with  the 
rest  of  mankind,  this  reasoning  would  not  be  equally  conclusive.  But  it 
appears  decisive,  when  considered  with  a  view  to  the  relations  which  com- 
merce has  created  between  us  and  other  countries. 

It  is,  however,  not  improbable,  that  the  effect  meditated  would  be  defeated 
by  a  rise  of  prices  proportioned  to  the  diminution  of  the  intrinsic  value  of 
the  coins.  This  might  be  looked  for  in  every  enlightened  commercial  coun- 
try; but  perhaps  in  none  with  greater  certainty  than  in  this;  because  in  none 
are  men  less  liable  to  be  the  dupes  of  sounds;  in  none  has  authority  so  little 
resource  for  substituting  names  for  things. 

A  general  revolution  in  prices,  though  only  nominally,  and  in  appearance, 
could  not  fail  to  distract  the  ideas  of  the  community;  and  would  be  apt  to 
breed  discontents  as  well  among  all  those  who  live  on  the  income  of  their 
money,  as  among  the  poorer  classes  of  the  people,  to  whom  the  necessaries 
of  life  would  seem  to  have  become  dearer.  In  the  confusion  of  such  a  state 
of  things,  ideas  of  value  would  not  improbably  adhere  to  the  old  coins, 
which,  from  that  circumstance,  instead  of  feeling  the  effect  of  the  loss  of 
their  privilege  as  money,  would  perhaps  bear  a  price  in  the  market  relatively 
to  the  new  ones,  in  exact  proportion  to  weight.  The  frequency  of  the  de- 
mand for  the  metals  to  pay  foreign  balances,  would  contribute  to  this  effect. 
Among  the  evils  attendant  on  such  an  operation,  are  these:  creditors,  both 
of  the  public  and  of  individuals,  would  lose  apart  of  their  property;  public 
and  private  credit  would  receive  a  wound;  the  effective  revenues  of  the 
government  would  be  diminished.  There  is  scarcely  any  point  in  the 
economy  of  national  affairs,  of  greater  moment  than  the  uniform  preserva- 
tion of  the  intrinsic  value  of  the  money  unit.  On  this  the  security  and 
steady  value  of  property  essentially  depend. 

The  second  method,  therefore,  of  defraying  the  expense  of  the  coinage 
out  of  the  metals,  is  greatly  to  be  preferred  to  the  other.  This  is  to  let  the 
same  sum  of  money  continue  to  represent  in  the  new  coins  exactly  the  same 
quantity  of  gold  and  silver  as  it  does  in  those  now  current;  to  allow  at  the 
mint  such  a  price  only  for  those  metals  as  will  admit  of  profit  just  sufficient 
to  satisfy  the  expense  of  coinage;  to  abolish  the  legal  currency  of  the  foreign 
coins,  both  in  public  and  private  payments;  and  of  course  to  leave  the  su- 
perior utility  of  the  national  coins  for  domestic  purposes,  to  operate  the 
difference  of  market  value,  which  is  necessary  to  induce  the  bringing  of 
bullion  to  the  mint.  In  this  case,  all  property  and  labor  will  still  be  repre- 
sented by  the  same  quantity  of  gold  and  silver  as  formerly;  and  the  only 
change  which  will  be  wrought,  will  consist  in  annexing  the  office  of  money 
exclusively  to  the  national  coins;  consequently,  withdrawing  it  from  those  of 
foreign  countries,  and  suffering  them  to  become,  as  they  ought  to  be,  mere  ' 
articles  of  merchandise. 


1791.]  SECRETARY  OF  THE  TREASURY.  145 

The  arguments  in  favor  of  a  regulation  of  this  kind  are,  first:  That  the 
want  of  it  is  a  cause  of  extra  expense:  there  being  then  no  motive  of  individual 
interest  to  distinguish  between  the  national  coins  and  bullion,  they  are,  it  is 
alleged,  indiscriminately  melted  down  for  domestic  manufactures,  and  ex- 
ported for  the  purposes  of  foreign  trade;  and  it  is  added,  that  when  the  coins 
become  light  by  wearing,  the  same  quantity  of  fine  gold  or  silver  bears  a 
higher  price  in  bullion  than  in  the  coins;  in  which  state  of  things,  the  melt- 
ing down  of  the  coins  to  be  sold  as  bullion  is  attended  with  profit;  and  from 
both  causes,  the  expense  of  the  mint,  or,  in  other  words,  the  expense  of 
maintaining  the  specie  capital  of  the  nation,  is  materially  augmented. 

Secondly.  That  the  existence  of  such  a  regulation  promotes  a  favorable 
course  of  exchange,  and  benefits  trade;  not  only  by  that  circumstance,  but 
by  obliging  foreigners,  in  certain  cases,  to  pay  dearer  for  domestic  commodi- 
ties, and  to  sell  their  own  cheaper. 

As  far  as  relates  to  the  tendency  of  a  free  coinage  to  produce  an  increase 
of  expense  in  the  different  ways  that  have  been  stated,  the  argument  must 
be  allowed  to  have  foundation,  both  in  reason  and  in  experience.  It  de- 
scribes what  has  been  exemplified  in  Great  Britain. 

The  effect  of  giving  an  artificial  value  to  bullion,  is  not  at  first  sight  ob- 
vious; but  it  actually  happened  at  the  period  immediately  preceding  the  late 
reformation  in  the  gold  coin  of  the  country  just  named.  A  pound  troy  in 
gold  bullion,  of  standard  fineness,  was  then  from  19s.  6d.  to  25*.  sterling  dear- 
er than  an  equal  weight  of  guineas,  as  delivered  at  the  mint.  The  phenome- 
non is  thus  accounted  for:  The  old  guineas  were  more  than  two  per  cent, 
lighter  than  their  standard  weight.  This  weight,  therefore,  in  bullion,  was 
truly  worth  two  per  cent,  more  than  those  guineas.  It  consequently  had, 
in  respect  to  them,  a  correspondent  rise  in  the  market. 

And  as  guineas  were  then  current  by  tale,  the  new  ones,  as  they  issued 
from  the  mint,  were  confounded  in  circulation  with  the  old  ones;  and  by 
the  association,  were  depreciated  below  the  intrinsic  value,  in  comparison 
with  bullion.  It  became  of  course  a  profitable  traffic  to  sell  bullion  for  coin, 
to  select  the  light  pieces,  and  re-issue  them  in  currency,  and  to  melt  down 
the  heavy  ones,  and  sell  them  again  as  bullion.  This  practice,  besides  other 
inconveniences,  cost  the  government  large  sums  in  the.  renewal  of  the  coins. 

But  the  remainder  of  the  argument  stands  upon  ground  far  more  ques- 
tionable. It  depends  upon  very  numerous  and  very  complex  combinations, 
in  which  there  is  infinite  latitude  for  fallacy  and  error. 

The  most  plausible  part  of  it,  is  that  which  relates  to  the  course  of  ex- 
change. Experience  in  France  has  shown  that  the  market  price  of  bullion 
has  been  influenced  by  the  mint  difference  between  that  and  coin;  sometimes 
to  the  full  extent  of  the  difference;  and  it  would  seem  to  be  a  clear  inference, 
that  whenever  that  difference  materially  exceeded  the  charges  of  remitting 
bullion  from  the  country  where  it  existed,  to  another  in  which  coinage  was 
free,  exchange  would  be  in  favor  of  the  former. 

If,  for  instance,  the  balance  of  trade  between  France  and  England,  were 
at  any  time  equal,  their  merchants  would  naturally  have  reciprocal  payments 
to  make  to  an  equal  amount,  which,  as  usual,  would  be  liquidated  by  means 
of  bills  of  exchange.  If  in  this  situation  the  difference  between  coin 
and  bullion  should  be  in  the  market,  as  at  the  mint  of  France,  eight  per  cent. ; 
if,  also,  the  charges  of  transporting  money  from  France  to  England,  should 
not  be  above  two  per  cent.;  and  if  exchange  should  be  at  par,  it  is  evident 
that  a  profit  of  six  per  cent,  might  be  made,  by  sending  bullion  from  France 


146  "REPORTS  OF  THE  T1791. 

to  England,  and  drawing  bills  for  the  amount.  One  hundred  louis  d'ors  in 
coin,  would  purchase  the  weight  of  one  hundred  and  eight  in  bullion;  one 
hundred  of  which,  remitted  to  England,  would  suffice  to  pay  a  debt  of  an 
equal  amount;  and  two  being  paid  for  the  charges  of  insurance  and  trans- 
portation there  would  remain  six  for  the  benefit  of  the  person  who  should 
manage  the  negotiation.  But  as  so  large  a  profit  could  not  fail  to  produce  com- 
petition, the  bills,  in  consequence  of  this,  would  decrease  in  price,  till 
the  profit  was  reduced  to  the  minimum  of  an  adequate  recompense  for  the 
trouble  and  risk.  And,  as  the  amount  of  one  hundred  louis  d'ors  in  Eng- 
land, might  be  afforded  for  ninety-sis  in  France,  with  a  profit  of  more 
than  one  and  a  half  per  cent.,  bills  upon  England,  might  fall  in  France  to 
four  per  cent,  below  par;  one  per  cent,  being  a  sufficient  profit  to  the  ex- 
changer or  broker  for  the  management  of  the  business. 

But  it  is  admitted  that  this  advantage  is  lost,  when' the  balance  of  trade 
is  against  the  nation  which  imposes  the  duty  in  question;  because,  by  in- 
creasing the  demand  for  bullion,  it  brings  this  to  a  par  with  the  coins;  and  it 
is  to  be  suspected,  that  where  commercial  principles  have  their  free  scope, 
and  are  well  understood,  the  market  difference  between  the  metals  in  coin 
and  bullion,  will  seldom  approximate  to  that  of  the  mint,  if  the  latter  be 
considerable.  It  must  be  not  a  little  difficult  to  keep  the  money  of  the 
world,  which  can  be  employed  to  an  equal  purpose  in  the  commerce  of  the 
world,  in  a  state  of  degradation,  in  comparison  with  the  money  of  a  parti- 
cular country. 

This  alone  would  seem  .sufficient  to  prevent  it:  whenever  the  price  of 
coin  to  bullion,  in  the  market,  materially  exceeded  the  par  of  the  metals,  it 
would  become  an  object  to  send  the  bullion  abroad,  if  not  to  pay  a  foreign 
balance,  to  be  invested  in  some  other  way  in  foreign  countries,  where  it 
bore  a  superior  value;  an  operation  by  which  immense  fortunes  might  be 
amassed,  if  it  were  not  that  the  exportation  of  the  bullion  would  of  itself 
restore  the  intrinsic  par.  But,  as  it  would  naturally  have  this  effect,  the 
advantage  supposed  would  contain  in  itself  the  principle  of  its  own  destruc- 
tion. As  long,  however,  as  the  exportation  of  bullion  could  be  made  with 
profit,  which  is  as  long  as  exchange  could  remain  below  par,  there  would  be 
a  drain  of  the  gold  and  silver  of  the  country. 

If  any  thing  can  maintain,  for  a  length  of  time,  a  material  difference  be- 
tween the  value  of  the  metals  in  coin  and  in  bullion,  it  must  be  a  constant 
and  considerable  balance  of  trade  in  favor  of  the  country  in  which  it  is  main- 
tained. In  one  situated  like  the  United  States,  it  would  in  all  probability 
be  a  hopeless  attempt.  The  frequent  demand  for  gold  and  silver,  to  pay 
balances  to  foreigners,  would  tend  powerfully  to  preserve  the  equilibrium  of 
intrinsic  value. 

The  prospect  is,  that  it  would  occasion  foreign  coins  to  circulate  by  com- 
mon consent,  nearly  at  par  with  the  national. 

To  say,  that  as  far  as  the  effect  of  lowering  exchange  is  produced,  though 
it  be  only  occasional  and  momentary,  there  is  a  benefit  the  more  thrown  in- 
to the  scale  of  public  prosperity,  is  not  satisfactory.  It  has  been  seen,  that 
it  may  be  productive  of  one  evil,  the  investment  of  a  part  of  the  national 
capital  in  foreign  countries;  which  can  hardly  be  beneficial  but  in  a  situation 
like  that  of  the  United  Netherlands,  where  an  immense  capital,  and  a  de^ 
crease  of  internal  demand,  render  it  necessary  to  find  employment  for  mo- 
ney in  the  wants  of  other  nations;  and,  perhaps  on  a  close  examination, 
.other  evils  may  be  descried. 


1791.1  SECRETARY  OF  THE  TREASURY.  147 

One  allied  to  that  which  has  been  mentioned  is  this — taking  France,  for 
the  sake  of  more  concise  illustration,  as  the  scene.  Whenever  it  happens 
that  French  louis  d'ors  are  sent  abroad,  from  whatever  cause,  if  there  be  a 
considerable  difference  between  coin  and  bullion,  in  the  market  of  France, 
it  will  constitute  an  advantageous  traffic  to  send  back  these  louis  d'ors,  and 
bring  away  bullion  in  lieu  of  them;  upon  all  which  exchanges,  France  must 
sustain  an  actual  loss  of  a  part  of  its  gold  and  silver. 

Again,  such  a  difference  between  coin  and  bullion  may  tend  to  counteract 
a  favorable  balance  of  trade.  Whenever  a  foreign  merchant  is  the  carrier 
of  his  own  commodities  to  France  for  sale,  he  has  a  strong  inducement  to 
bring  back  specie,  instead  of  French  commodities;  because  a  return  in  the 
latter  may  afford  no  profit,  may  even  be  attended  with  loss;  in  the  former, 
it  will  afford  a  certain  profit.  The  same  principle  must  be  supposed  to  ope- 
rate in  the  general  course  of  remittances  from  France  to  other  countries. 
The  principal  question  with  a  merchant,  naturally  is,  In  what  manner  can  I 
realize  a  given  sum,  with  most  advantage,  where  I  wish  to  place  it?  And, 
in  cases  in  which  other  commodities  are  not  likely  to  produce  equal  profit 
with  bullion,  it  may  be  expected  that  this  will  be  preferred;  to  which  the 
greater  certainty  attending  the  operation  must  be  an  additional  incitement- 
There  can  hardly  be  imagined  a  circumstance  less  friendly  to  trade,  than  the 
existence  of  an  extra  inducement  arising  from  the  possibility  of  a  profitable 
speculation  upon  the  articles  themselves,  to  export  from  a  country  its  gold 
and  silver,  rather  than  the  products  of  its  land  and  labor. 

The  other  advantages  supposed,  of  obliging  foreigners  to  pay  dearer  for 
^domestic  commodities,  and  to  sell  their  own  cheaper,  are  applied  to  a  situa- 
tion which  includes  a  favorable. balance  of  trade.  It  is  understood  in  this 
sense — the  prices  of  domestic  commodities,  (such,  at  least,  as  are  peculiar  to 
the  country,)  remain  attached  to  the  denominations  of  the  coins.  When  a 
favorable  balance  of  trade  realizes  in  the  market  the  mint  difference  between 
coin  and  bullion,  foreigners,  who  must  pay  in  the  latter,  are  obliged  to  give 
more  of  it  for  such  commodities  than  they  otherwise  would  do.  Again, 
the  bullion,  which  is  now  obtained  at  a  cheaper  rate  in  the  home  market, 
will  procure  the  same  quantity  of  goods  in  the  foreign  market  as  before; 
which  is  said  to  render  foreign  commodities  cheaper.  In  this  reasoning, 
much  fallacy  is  to  be  suspected.  If  it  be  true,  that  foreigners  pay  more  for 
domestic  commodities,  it  must  be  equally  true  that  they  get  more  for  their 
own  when  they  bring  them  themselves  to  market.  If  peculiar,  or  other  do^ 
mestic  commodities  adhere  to  the  denominations  of  the  coins,  no  reason  occurs 
why  foreign  commodities  of  alike  character  should  not  do  the  same  thing;  and 
in  this  case  theforeigner,  though  he  receive  only  the  same  value  in  coin  for  his 
merchandise  as  formerly,  can  convert  it  into  a  greater  quantity  of  bullion. 
Whence  the  nation  is  liable  to  lose  more  of  its  gold  and  silver  than  if  their 
intrinsic  value  in  relation  to  the  coins  were  preserved.  And  whether  the 
gain  or  the  loss  will,  on  the  whole,  preponderate,  would  appear  to  depend 
on  the  comparative  proportion  of  active  commerce  of  the  one  country  with 
the  other. 

It  is  evident,  also,  that  the  nation  must  pay  as  much  gold  and  silver  at 
before,  for  the  commodities  which  it  procures  abroad;  and  whether  it  obtains 
this  gold  and  silver  cheaper  or  not,  turns  upon  the  solution  of  the  question 
just  intimated,  respecting  the  relative  proportion  of  active  commerce  between 
the  two  countries. 

Besides  these  considerations,  it  is  admitted  in  the  reasoning,  that  the  ad- 
20 


148  REPORTS  OF  THE  ("1791. 

vantages  supposed,  which  depend  on  a  favorable  balance  of  trade,  have  a 
tendency  to  affect  that  balance  disadvantageously.  Foreigners,  it  is  allowed, 
will  in  this  case  seek  some  other  vent  for  their  commodities,  and  some  other 
market  where  they  can  supply  their  wants  at  an  easier  rate.  A  tendency 
of  this  kind,  if  real,  would  be  a  sufficient  objection  to  the  regulation.  No- 
thing which  contributes  to  change  a  beneficial  current  of  trade,  can  well 
compensate,  by  particular  advantages,  for  so  injurious  an  effect.  It  is  far 
more  easy  to  transfer  trade  from  a  less  to  a  more  favorable  channel,  than, 
when  once  transferred,  to  bring  it  back  to  its  old  one.  Every  source  of  ar- 
tificial interruption  to  an  advantageous  current,  is,  therefore,  cautiously  to 
be  avoided. 

It  merits  attention,  that  the  able  minister,  who  lately  and  so  long  presided 
over  the  finances_of  France,  does  not  attribute  to  the  duty  of  coinage  in  that 
country,  any  particular  advantages  in  relation  to  exchange  and  trade.  Though 
he  rather  appears  an  advocate  for  it,  it  is  on  the  sole  ground  of  the  revenue 
it  affords,  which  he  represents  as  in  the  nature  of  a  very  moderate  duty  on 
the  general  mass  of  exportation. 

Audit's  not  improbable  that,  to  the  singular  felicity  of  situation  of  that 
kingdom,  is  to  be  attributed  its  not  having  been  sensible  of  the  evils  which 
seem  incident  to  the  regulation.  There  is,  perhaps,  no  part  of  Europe 
which  has  so  little  need  of  other  countries  as  France.  Comprehending  a 
variety  of  soils  and  climates,  an  immense  population,  its  agriculture  in  a 
state  of  mature  improvement,  it  possesses  within  its  own  bosom,  most,  if  not 
all,  the  productions  of  the  earth,  which  any  of  its  most  favored  neighbors 
can  boast.  The  variety,  abundance,  and  excellence  of  its  wines,  constitute 
a  peculiar  advantage  in  its  favor.  Arts  and  manufactures  are  there  also  in  a 
very  advanced  state;  some  of  them,  of  considerable  importance,  in  higher 
perfection  than  elsewhere.  Its  contiguity  to  Spain;  the  intimate  nature  of  its 
connexion  with  that  country;  a  country  with  few  fabrics  of  its  own,  conse- 
quently numerous  wants,  and  the  principal  receptacle  of  the  treasures  of  the 
new  world:  These  circumstances  concur,  in  securing  to  France  so  uniform 
and  so'  considerable  a  balance  of  trade,  as  in  a  great  measure  to  counteract  the 
natural  tendency  of  any  errors  which  may  exist  in  the  system  of  her  mint; 
and  to  render  inferences  from  the  operation  of  that  system  there,  in  reference 
to  this  country,  more  liable  to  mislead  than  to  instruct.  Nor  ought  it  to 
pass  unnoticed,  that,  with  all  these  advantages,  the  government  of  France 
has  found  it  necessary,  on  some  occasions,  to  employ  very  violent  methods 
to  compel  the  bringing  of  bullion  to  the  mint;  a  circumstance  which  affords 
a  strong  presumption  of  the  inexpediency  of  the  regulation,  and  of  the  im- 
practicability of  executing  it  in  the  United  States. 

This  point  has  been  the  longer  dwelt  upon,  not  only  because  there  is  a 
diversity  of  opinion  among  speculative  men  concerning  it,  and  a  diversity 
in  the  practice  of  the  moat  considerable  commercial  nations,  but  because  the 
acts  of  our  own  government,  under  the  confederation,  have  not  only  admit- 
ted the  expediency  of  defraying  the  expense  of  coinage  out  of  the  metals 
themselves,  but  upon  this  idea  have  both  made  a  deduction  from  the  weight 
of  the  coins,  and  established  a  difference  between  their  regulated  value  and 
the  mint  price  of  bullion,  greater  than  would  result  from  that  deduction. 
This  double  operation  in  favor  of  a  principle  so  questionable  in  itself,  has 
made  a  more  particular  investigation  of  it  a  duty. 

The  intention,  however,  of  the  preceding  remarks,  is  rather  to  show  that 
the  expectation  of  commercial  advantages  ought  not  to  decide  in  favor  of  a 


1791.]  SECRETARY  OF  THE  TREASURY.  149 

duty  of  coinage,  and  that,  if  it  should  be  adopted,  it  ought  not  to  be  in  the 
form  of  a  deduction  from  the  intrinsic  value  of  the  coins — than  absolutely  to 
exclude  the  idea  of  any  difference  whatever  between  the  value  of  the 
metals  in  coin  and  in  bullion.  It  is  not  clearly  discerned,  that  a  small  dif- 
ference between  the  mint  price  of  bullion  and  the  regulated  value  of  the 
coins  would  be  pernicious,  or  that  it  might  not  even  be  adviseable,  in  the 
first  instance,  by  way  of  experiment,  merely  as  a  preventive  to  the  melting 
down  and  exportation  of  the  coins.,  This  will  now  be  somewhat  more 
particularly  considered. 

The  arguments  for  a  coinage  entirely  free,  are,  that  it  preserves  the  intrin- 
sic value  of  the  metals;  that  it  makes  the  expense  of  fabrication  a  general  in- 
stead of  a  partial  tax,  and  that  it  tends  to  promote  the  abundance  of  gold  and 
silver,  which,  it  is  alleged,  will  flow  to  that  place  where  they  find  the  best 
price,  and  from  that  place  where  they  are  in  any  degree  undervalued. 

The  first  consideration  has  not  much  weight,  as  an  objection  to  a  plan 
which,  without  diminishing  the  quantity  of  metals  in  the  coins,  merely 
allows  a  less  price  for  them  in  bullion  at  the  national  factory  or  mint.  No 
rule  of  intrinsic  value  is  violated,  by  considering  the  raw  material  as  worth 
less  than  the  fabric  in  proportion  to  the  expense  of  fabrication.  And,  by 
divesting  foreign  coins  of  the  privilege  of  circulating  as  money,  they  be- 
come the  raw  material. 

The  second  consideration  has  perhaps  greater  weight.  But  it  may  not 
amount  to  an  objection,  if  it  be  the  best  method  of  preventing  disorders  in 
the  coins,  which  it  is  in  a  particular  manner  the  interest  of  those,  on  whom 
th'e  tax  would  fall,  to  prevent.  The  practice  of  taking  gold  by  weight, 
which  has  of  late  years  obtained  in  Great  Britain,  has  been  found,  in  some 
degree,  a.Vemedy;  but  this  is  inconvenient,  and  may  on  that  account  fall 
into  disuse.  Another  circumstance  has  had  a  remedial  operation.  This  is 
the  delays  of  the  mint.  It  appears  to  be  the  practice  there,  not  to  make 
payment  for  the  bullion  which  is  brought  to  be  exchanged  for  coin,  till  it 
either  has  in  fact,  or  is  pretended  to  have  undergone  the  process  of  recoining. 

The  necessity  of  fulfilling  prior  engagements,  is  a  cause  or  pretext  for 
postponing  the  delivery  of  the  coin  in  lieu  of  the  bullion.  And  this  delay 
creates  a  difference  in  the  market  price  of  the  two  things.  Accordingly, 
for  some  years  past,  an  ounce  of  standard  gold,  which  is  worth  in  coin 
£3  17  10§  sterling,  has  been  in  the  market  of  London,  in  bullion,  only 
£  3  17  6,  which  is  within  a  small  fraction  of  one  hajf  per  cent.  less. 
Whether  this  be  management  in  the  mint  to  accommodate  the  bank  in  the 
purchase  of  bullion,  or  to  effect  indirectly  something  equivalent  to  a  formal 
difference  of  price,  or  whether  it  be  the  natural  course  of  the  business,  is 
open  to  conjecture. 

It  at  the  same  time  indicates,  that  if  the  mint  were  to  make  prompt  pay- 
ment, at  about  half  per  cent,  less  than  it  does  at  present,  the  state  of  bullion 
in  respect  to  coin,  would  be  precisely  the  same  as  it  now  is.  And  it  would 
be  then  certain,  that  the  government  would  save  expense  in  the  coinage  of 
gold;  sinee  it  is  not  probable  that  the  time  actually  lost  in  the  course  of  the 
year,  in  converting  bullion  intq  coin,  can  be  an  equivalent  to  half  per  cent, 
on  the  advance,  and  there  will  generally  be  at  the  command  of  the  Treasu- 
ry a  considerable  sum  of  money  waiting  for  some  periodical  disbursement, 
which,  without  hazard,  might  be  applied  to  that  advance. 

In  what  sense  a  free  coinage  can  be  said  to  promote  the  abundance  of  gold 
and  silver,  may  be  inferred  from  the  instances  which  have  been  given  of 


150  REPORTS  OF  THE  [1791. 

the  tendency  of  a  contrary  system  to  promote  their  exportation.  It  is,  how- 
ever, not  probable,  that  a  very  small  difference  of  value  between  coin  and 
bullion  can  have  any  effect  which  ougbt  to  enter  into  calculation.  There 
can  be  no  inducement  of  positive  profit,  to  export  the  bullion,  as  long  as  the 
difference  of  price  is  exceeded  by  the  expense  of  transportation.  And  the 
prospect  of  smaller  loss  upon  the  metals  than  upon  commodities,  when  the 
difference  is  very  minute,  will  be  frequently  overbalanced  by  the  possibility 
of  doing  better  with  the  latter,  from  a  rise  of  markets.  It  is,  at  any  rate, 
certain,  that  it  can  be  of  no  consequence  in  this  view,  whether  the  superiority 
of  coin  to  bullion  in  the  market,  be  produced,  as  in  England,  by  the  delay 
of  the  mint,  or  by  a  formal  discrimination  in  the  regulated  values. 

Under  an  impression  that  a  small  difference  between  the  value  of  the 
coin  and  the  mist  price  of  bullion,  is  the  least  exceptionable  expedient  for 
restraining  the  melting  down,  or  exportation  of  the  former,  and  not  perceiv- 
ing that,  if  it  be  a  very  moderate  one,  it  can  be  hurtful  in  other  respects — 
the  Secretary  is  inclined  to  an  experiment  of  one  half  per  cent,  on  each  of  the 
metals.  The  fact  which  has  been  mentioned,  with  regard  to  the  price  of 
gold  bullion  in  the  English  market,  seems  to  demonstrate  that  such  a  differ- 
ence may  safely  be  made.  In  this  case,  there  must  be  immediate  payment 
for  the  gold  and  silver  offered  to  the  mint.  How  far  one  half  per  cent,  will  go 
towards  defraying  the  expense  of  the  coinage,  cannot  be  determined  before-? 
hand  with  accuracy.  It  is  presumed  that,  on  an  economical  plan,  it  will 
suffice  in  relation  to  gold.  But  it  is  not  expected  that  the  same  rate  on  silver 
will  be  sufficient  to  defray  the  expense  attending  that  metal.  Some  addi- 
tional provision  may  therefore  be  found  necessary,  if  this  limit  be  adopted. 

It  ddes  not  seem  to  be  adviseable  to  make  any  greater  difference  in  regard 
to  silver  than  to  gold;  because  it  is  desirable  that  the  proportion  between  the 
two  metals  in  the  market,  should  correspond  with  that  in  the  coins,  which 
would  not  be  the  case  if  the  mint  price  of  one  was  comparatively  lower 
than  that  of  the  other;  and  because,  also,  silver  being  proposed  to  be  rated 
in  respect  to  gold,  somewhat  below  its  general  commercial  value,  if  there 
should  be  a  disparity  to  its  disadvantage  in  the  mint  prices  of  the  two  metals, 
it  would  obstruct  too  much  the  bringing  of  it  to  be  coined,  and  would  add  an 
inducement  to  export  it.  Nor  does  it  appear  .to  the  Secretary  safe  to  make. 
a  greater  difference  between  the  value  of  coin  and  bullion,  than  has  been 
mentioned.  It  will  be  better  to  have  to  increase  it  hereafter,  if  this  shall 
be  found  expedient,  than  to  have  to  recede  from  too  considerable  a  differ- 
ence, in  consequence  of  evils  which  shall  have  been  experienced. 

It  is  sometimes  mentioned,  as  an  expedient,  which,  consistently  with  a 
free  coinage,  may  serve  to  prevent  the  evils  desired  to  be  avoided,  to  incor- 
porate in  the  coins  a  greater  proportion  of  alloy  than  is  usual;  regulating 
their  value,  nevertheless,  according  to  the  quantity  of  pure  metal  they  con- 
tain. This,  it  is  supposed,  by  adding  to  the  difficulty  of  refining  them, 
wotild  cause  bullion  to  be  preferred  both  for  manufacture  and  exportation. 

Btit  strong  objections  lie  against  this  scheme: — an  augmentation  of  ex- 
pense; an  actual  depreciation  of  the  coin;  a  danger  of  still  greater  depre- 
ciation in  the  public  opinion;  the  facilitating  of  counterfeits;  while  it  is 
questionable  whether  it  would  have  the  effect  expected  from  it. 

The  alloy  being  esteemed  of  no  value,  an  increase  of  it  is  evidently  an 
increase  of  expense.  This,  in  relation  to  the  gold  coins,  particularly,  is  a 
matter  of  moment.  It  has  been  noted,  that  the  alloy  in  them  consists  partly 
of  .niter.      If,  to  avoid  expense,  the  addition  should  be  of  copper  only,  this 


1791.]  SECRETARY  OF  THE  TREASURY.  151 

would  spoil  the  appearance  of  the  coin,  and  give  it  a  base  countenance.  Its 
beauty  would  indeed  be  injured,  though  in  a  less  degree,  even  if  the  usual 
proportions  of  silver  and  copper  should  be  maintained  in  the  increased  quan- 
tity of  alloy. 

And,  however  inconsiderable  an  additional  expenditure  of  copper  in  the 
coinage  of  a  year  may  be  deemed,  in  a  series  of  years  it  would  become  of 
consequence.  In  regulations  which  contemplate  the  lapse  and  operation  of 
ages,  a  very  small  item  of  expense  acquires  importance. 

The  actual  depreciation  of  the  coin  by  an  increase  of  alloy,  results  from 
the  very  circumstance  which  is  the  motive  to  it — the  greater  difficulty  of 
refining.  In  England,  it  is  customary  for  those  concerned  in  manufactures 
of  gold,  to  make  a  deduction  in  the  price  of  four-pence  sterling  per  ounce, 
of  fine  gold,  for  every  carat  which  the  mass  containing  it  is  below  the  legal 
standard.  Taking  this  as  a  rule,  an  inferiority  of  a  single  carat,  or  one 
twenty-fourth  part  in  the  gold  coins  of  the  United  States,  compared  with 
the  English  standard,  would  cause  the  same  quantity  of  pure  gold  in  them 
to  be  worth  nearly  four-tenths  per  cent,  less  than  in  the  coins  of  Great  Bri- 
tain. This  circumstance  would  be  likely,  in  process  of  time,  to  be  felt  in 
the  market  of  the  United  States. 

A  still  greater  depreciation,  in  the  public  opinion,  would  be  to  be  appre- 
hended from  the  apparent  debasement  of  the  coin.  The  effects  of  imagi- 
nation and  prejudice  cannot  safely  be  disregarded,  in  any  thing  that  relates 
to  money.  If  the  beauty  of  the  coin  be  impaired,  it  may  be  found  difficult 
to  satisfy  the  generality  of  the  community,  that  what  appears  worst  is  not 
really  less  valuable;  and  it  is  not  altogether  certain,  that  an  impression  of  its 
being  so,  may  not  occasion  an  unnatural  augmentation  of  prices. 

Greater  danger  of  imposition,  by  counterfeits,  is  also  to  be  apprehended 
from  the  injury  which  will  be  done  to  the  appearance  of  the  coin.  It  is  a 
just  observation,  that  "  The  perfection  of  the  coins  is  a  great  safeguard 
against  counterfeits."  And  it  is  evident  that  the  color,  as  well  as  the  excel- 
lence of  the  workmanship,  is  an  ingredient  in  that  perfection.  The  inter- 
mixture of  too  much  alloy,  particularly  of  copper,  in  the  gold  coins  at  least, 
must  materially  lessen  the  facility  of  distinguishing,  by  the  eye,  the  purer 
from  the  baser  kind — the  genuine  from  the  counterfeit. 

The  inefficacy  of  the  arrangement  to  the  purpose  intended  to  be  answered 
by  it,  is  rendered  probable  by  different  considerations.  If  the  standard  of 
plate  in  the  United  States  should  be  regulated  according  to  that  of  the  na- 
tional coins  it  is  to  be  expected  that  the  goldsmith  would  prefer  these  to 
the  foreign  coins,  because  he  would  find  them  prepared  to  his  hand,  in  the 
state  which  he  desires;  whereas  he  would  have  to  expend  an  additional 
quantity  of  alloy  to  bring  the  foreign  coins  to  that  state.  If  the  standard  of 
plate,  by  law  or  usage,  should  be  superior  to  that  of  the  national  coins,  there 
would  be  a  possibility  of  the  foreign  coins  bearing  a  higher  price  in  the  mar- 
ket; and  this  would  not  only  obstruct  their  being  brought  to  the  mint,  but 
might  occasion  the  exportation  of  the  national  coin  in  preference.  It  is  not 
understood,  that  the  practice  of  making  an  abatement  of  price  for  the  inferi- 
ority of  standard,  is  applicable  to  the  English  mint;  and  if  it  be  not,  this 
would  also  contribute  to  frustrating  the  expected  effect  from  the  increase  of 
alloy.  For,  in  this  case,  a  given  quantity  of  pure  metal,  in  our  standard, 
would  be  worth  as  much  there  as  in  bullion  of  the  English  or  any  other 
standard. 

Considering,  therefore,  the  uncertainty  of  the  success  of  the  expedient, 


152  REPORTS  OF  THE  [1791. 

and  the  inconveniences  which  seem  incident  to  it,  it  would  appear  preferable 
,±o  submit  to  those  of  a  free  coinage.  It  is  observable,  that  additional  ex- 
pense, which  is  one  of  the  principal  of  these,  is  also  applicable  to  the  pro- 
posed remedy. 

It  is  now  proper  to  resume  and  finish  the  answer  to  the  first  question,  in 
order  to  which  the  three  succeeding  ones  have  necessarily  been  anticipated. 
The  conclusion  to  be  drawn  from  the  observations  which  have  been  made 
on  the  subject,  is  this:  That  the  unit,  in  the  coins  of  the  United  States,  ought 
to  correspond  with  24  grains  and  I  of  a  grain  of  pure  gold,  and  with  371 
grains  and  i  of  a  grain  of  pure  silver,  each  answering  to  a  dollar  in  the 
money  of  account.  The  former  is  exactly  agreeable  to  the  present  value  of 
gold,  and  the  latter  is  within  a  small  fraction  of  the  mean  of  the  two  last 
emissions  of  dollars — the  only  ones  which  are  now  found  in  common  circu- 
lation, and  of  which  the  newest  is  in  the  greatest  abundance.  The  alloy  in 
each  case  to  be  one-twelfth  of  the  total  weight,  which  will  make  the  unit 
27  grains  of  standard  gold,  and  405  grains  of  standard  silver. 

Kach  of  these,  it  has  been  remarked,  will  answer  to  a  dollar  in  the  money 
of  account.  It  is  conceived  that  nothing  better  can  be  done  in  relation  to 
this,  than  to  pursue  the  track  marked  out  by  the  resolution  of  the  8th  of 
August,  1786.  This  has  been  approved  abroad,  as  well  as  at  home,  and 
it  is  certain  that  nothing  can  be  more  simple  or  convenient,  than  the  decimal 
subdivisions.  There  is  every  reason  to  expect  that  the  method  will  speedily 
grow  into  general  use,  when  it  shall  be  seconded  by  corresponding  coins. 
On  this  plan,  the  unit  in  the  money  of  account  will  continue  to  be,  as  esta- 
blished by  that  resolution,  a  dollar;  and  its  multiples,  dimes,  cents,  and  mills, 
or  tenths,  hundredths,  and  thousandths. 

With  regard  to  the  number  of  different  pieces  which  shall  compose  the 
coins  of  the  United  States,  two  things  are  to  be  consulted — convenience  of 
circulation,  and  cheapness  of  the  coinage.  The  first  ought  not  to  be  sacri-s 
ficed  to  the  last;  but  as  far  as  they  can  be  reconciled  to  each  other,  it  is  desi- 
rable to  do  it  Numerous  and  small  (if  not  too  minute)  subdivisions  assist 
circulation;  but  the  multiplication  of  the  smaller  kinds  increases  expense? 
the  same  process  being  necessary  to  a  small  as  to  a  large  piece. 

As  it  is  easy  to  add,  it  will  be  most  adviseable  to  begin  with  a  small  num- 
ber, till  experience  shall  decide  whether  any  other  kinds  are  necessary. 
The  following,  it  is  conceived,  will  be  sufficient  in  the  commencement: 

One  gold  piece,  equal  in  weight  and  value  to  ten  units  or  dollars. 

One  gold  piece,  equal  to  a  tenth  part  of  the  former,  and  which  shall  be  a 
unit  or  dollar. 

One  silver  piece,  which  shall  also  be  a  unit  or  dollar. 

One  silver  piece,  which  shall  be,  in  weight  and  value,  a  tenth  part  of  the 
silver  unit  or  dollar. 

One  copper  piece,  which  shall  be  of  the  value  of  a  hundredth  part  of  a 
dollar. 

One  other  copper  piece,  which  shall  be  half  the  value  of  the  former. 

It  is  not  proposed  that  the  lightest  of  the  two  gold  coins  should  be  nume- 
rous, as,  in  large  payments,  the  larger  the  pieces  the  shorter  the  process  of 
counting,  the  less  risk  of  mistake,  and,  consequently,  the  greater  the  safety 
and  the  convenience;  and,  in  small  payments,  it  is  not  perceived  that  any 
inconvenience  can  accrue  from  an  entire  dependance  on  the  silver  and  cop- 
per coins.  The  chief  inducement  to  the  establishment  of  the  small  gold 
piece,  is  to  have  a  sensible  object  in  that  metal,  as  well  as  in  silver,  to  ex- 


1791/1  SECRETARY  OF  THE  TREASURY.  I53 

press  the  unit.     Fifty  thousand  at  a  time  in  circulation,  may  suffice  for  this 
purpose. 

The  tenth  part  of  a  dollar  is  but  a  small  piece,  and,  with  the  aid  of  the 
copper  coins,  will  probably  suffice  for  all  the  more  minute  uses  of  circulation. 
It  is  less  than  the  least  of  the  silver  coins  now  in  general  currency  in  Eng- 
land. 

The  largest  copper  piece  will  nearly  answer  to  the  halfpenny  sterling,  and 
the  smallest,  of  course,  to  the  farthing.  Pieces  of  very  small  value  are  a 
great  accommodation,  and  the  means  of  a  beneficial  economy  to  the  poor,  by 
enabling  them  to  purchase,  in  small  portions,  and  at  a  more  reasonable  rate, 
the  necessaries  of  which  they  stand  in  need.  If  there  are  only  cents,  the 
lowest  price  for  any  portion  of  a  vendible  commodity,  however  inconsider- 
able in  quantity,  will  be  a  cent;  if  there  are  half  cents,  it  will  be  a  half  cent, 
and  in  a  great  number  of  cases  exactly  the  same  things  will  be  sold  for  a  half 
cent,  which,  if  there  were  none,  would  cost  a  cent.  But  a  half  cent  is  low 
enough  for  the  minimum  of  price.  Excessive  minuteness  would  defeat  its 
object.  To  enable  the  poorer  classes  to  procure  necessaries  cheap,  is  to  en- 
able them  with  more  comfort  to  themselves  to  labor  for  less:  the  advantages 
of  which  need  no  comment. 

The  denominations  of  the  silver  coins  contained  in  the  resolution  of  the 
8th  of  August,  1786,  are  conceived  to  be  significant  and  proper.  The  dol- 
lar is  recommended  by  its  correspondency  with  tha  present  coin  of  that . 
name  for  which  it  is  designed  to  be  a  substitute,  which  will  facilitate  its 
ready  adoption  as  such  in  the  minds  of  the  citizens.  The  disme,  or  tenth, 
the  cent,  or  hundredth,  the  mille,  or  thousandth,  are  proper,  because  they 
express  the  proportions  which  they  are  intended  to  designate.  It  is  only  to 
be  regretted,  that  the  meaning  of  these  terms  will  not  be  familiar  to  those 
who  are  not  acquainted  with  the  language  from  which  they  are  borrowed. 
It  were  to  be  wished  that  the  length,  and  in  some  degree  the  clumsiness  of 
some  of  the  corresponding  terms  in  English,  did  not  discourage  from  pre- 
ferring them.  It  is  useful  to  have  names  which  signify  the  things  to  which 
they  belong;  and,  in  respect  to  objects  of  general  use,  in  a  manner  intelligi- 
ble to  all.  Perhaps  it  might  be  an  improvement  to  let  the  dollar  have  the 
appellation  either  of  dollar  or  unit,  (which  last  will  be  the  most  significant,) 
and  to  substitute  "tenth"  for  disme.  In  time,  the  unit  may  succeed  to  the 
dollar.  The  word  cent,  being  in  use  in  various  transactions  and  instruments, 
will,  without  much  difficulty,  be  understood  as  the  hundredth;  and  the  half 
cent,  of  course,  as  the  two-hundredth  part. 

The  eagle  is  not  a  very  expressive  or  apt  appellation  for  the  largest  gold 
piece,  but  nothing  better  occurs.  The  smallest  of  the  two  gold  coins  may 
be  called  the  dollar  or  unit,  in  common  with  the  silver  piece  with  which  it 
coincides. 

The  volume  or  size  of  each  piece  is  a  matter  of  more  consequence  than 
its  denomination.  It  is  evident,  that  the  more  superficies  or  surface,  the 
more  the  piece  will  be  liable  to  be  injured  by  friction;  or,  in  other  words, 
the  faster  it  will  wear.  For  this  reason,  it  is  desirable  to  render  the  thick- 
ness as  great,  in  proportion  to  the  breadth,  as  may  consist  with  neatness  and 
good  appearance.  Hence  the  form  of  the  double  guinea,  or  double  louis- 
d'or,  is  preferable  to  that  of  the  half  Johannes,  for  the  large  gold  piece.  The 
small  one  cannot  well  be  of  any  other  size  than  the  Portuguese  piece  of  eight, 
of  the  same  metal. 


154  REPORTS  OF  THE  [1791. 

As  it  is  of  consequence  to  fortify  the  idea  of  the  identity  of  the  dollar  ^  it 
may  be  best  to  let  the  form  and  size  of  the  new  one,  as  far  as  the  quantity 
of  matter  (the  alloy  being  less)  permits,  agree  with  the  form  and  size  of  the 
present.     The  diameter  may  be  the  same. 

The  tenths  may  be  in  a  mean  between  the  Spanish  |  and  -^  of  a  dollar. 

The  copper  coins  may  be  formed  merely  with  a  view  to  good  appearance, 
as  any  difference  in  the  wearing  that  can  result  from  difference  of  form,  can 
be  of  little  consequence  in  reference  to  that  metal. 

It  is  conceived  that  the  weight  of  the  cent  may  be  eleven  pennyweight; 
which  will  about  correspond  with  the  value  of  the  copper  and  the  expense 
of  coinage.  This  will  be  to  conform  to  the  rule  of  intrinsic  value,  as  far  as 
regard  to  the  convenient  size  of  the  coins  will  permit;  and  the  deduction  of 
the  expense  of-coinage  in  this  case  will,  be  the  more  proper,  as  the  copper 
coins,  which  have  been  current  hitherto,  have  passed  till  lately  for  much 
more  than  their  intrinsic  value.  Taking  the  weight,  as  has  been  suggested, 
the  size  of  the  cent  may  be  nearly  that  of  the  piece  herewith  transmitted, 
which  weighs  lOdwt.  llgrs.  10m.  Two-thirds  of  the  diameter  of  the  cent 
will  suffice  for  the  diameter  of  the  half  cent. 

It  may,  perhaps,  be  thought  expedient,  according  to  general  practice,  to 
make  the  copper  coinage  an  object  of  profit;  but  where  this  is  done  to  any 
considerable  extent,  it  is  hardly  possible  to  have  effectual  security  against 
counterfeits.  This  consideration,  concurring  with  the  soundness  of  the 
principle  of  preserving  the  intrinsic  value  of  the  money  of  a  country,  seems 
to  outweigh  the  consideration  of  profit. 

The  foregoing  suggestions,  respecting  the  sizes  of  the  several  coins,  are 
made  on  the  supposition  that  the  legislature  may  think  fit  to  regulate  this 
matter.  Perhaps,  however,  it  may  be  judged  not  unadviseable  to  leave  it  to 
executive  discretion, 

With  regard  to  the  proposed  size  of  the  cent,  it  is  to  be  confessed,  that  it 
is  rather  greater  than  might  be  wished,  if  it  could  with  propriety  and  safety 
be  made  less:  and  should  the  value  of  copper  continue  to  decline,  as  it  has 
done  for  some  time  past,  it  is  very  questionable  whether  it  will  long  remain 
alone  a  fit  metal  for  money.  This  has  led  to  a  consideration  of  the  expedi- 
ency of  uniting  a  small  proportion  of  silver  with  the  copper,  in  order  to  be 
able  to  lessen  the  bulk  of  the  inferior  coins.  For  this,  there  are  precedents 
in  several  parts  of  Europe.  In  France,  the  composition  which  is  called  bil- 
lion, has  consisted  of  one  part  silver  and  four  parts  copper;  according  to 
which  proportion,  a  cent  might  contain  seventeen  grains,  defraying  out  of 
the  material  the  expense  of  coinage.  The  conveniency  of  size  is  a  recommend- 
ation of  such  a  species  of  coin;  but  the  Secretary  is  deterred  from  propos- 
ing it,  by  the  apprehension  of  counterfeits.  The  effect  of  so  small  a  quantity 
of  silver,  in  comparatively  so  large  a  quantity  of  copper,  could  easily  be 
imitated  by  a  mixture  of  other  metals  of  little  value,  and  the  temptation  to 
doing  it  would  not  be  inconsiderable. 

The  devices  of  the  coins  are  far  from  being  matters  of  indifference,  as  they 
may  be  made  the  vehicles  of  useful  impressions.  They  ought,  therefore, 
to  be  emblematical,  but  without  losing  sight  of  simplicity.  The  fewer 
sjharp  points  and  angles  there  are,  the  less  will  be  the  loss  by  wearing. 
The  Secretary  thinks  it  best,  on  this  head,  to  confine  himself  to  these  coneise 
and  general  remarks. 

The  last  point  to  be  discussed,  respects  the  currency  of  foreign  coinsv 


1791,]  SECRETARY  OF  THE  TREASURY.  155 

The  abolition  of  this,  in  proper  season,  is  a  necessary  part  of  the  system 
contemplated  for  the  national  coinage.  But  this  it  will  be  expedient  to  de- 
fer, till  some  considerable  progress  has  been  made  in  preparing  substitutes 
for  them.     A  gradation  may,  therefore,  be  found  most  convenient. 

The  foreign  coins  may  be  suffered  to  circulate,  precisely  upon  their  pre- 
sent footing,  for  one  year  after  the  Mint  shall  have  commenced  its  operations. 
The  privilege  may  then  be  continued  for  another  year,  to  the  gold  coins  of 
Portugal,  England,  and  France,  and  to  the  silver  coins  of  Spain.  And  these 
may  still  be  permitted  to  be  current,  for  one  year  more,  at  the  rates  allowed 
to  be  given  for  them  at  the  Mint;  after  the  expiration  of  which,  the  circula- 
tion of  all  foreign  coins  to  cease. 

The  moneys  which  will  be  paid  into  the  Treasury  during  the  first  year, 
being  re-coined,  before  they  are  issued  anew,  will  afford  a  partial  substitute, 
before  any  interruption  is  given  to  the  pre-existing  supplies  of  circulation. 
The  revenues  of  the  succeeding  year,  and  the  coins  which  will  be  brought 
to  the  Mint,  in  consequence  of  the  discontinuance  of  their  currency,  will 
materially  extend  the  substitute,  in  the  course  of  that  year,  and  its  extension 
will  be  so  far  increased,  during  the  third  year,  by  the  facility  of  procurino- 
the  remaining  species  to  be  re-coined,  which  will  arise  from  the  diminution 
of  their  current  values,  as  probably  to  enable  the  dispensing  wholly  with  the 
circulation  of  the  foreign  coins,  after  that  period.  .  The  progress  which  the 
currency  of  bank  bills  will  be  likely  to  have  made,  during  the  same  time, 
will  also  afford  a  substitute  of  another  kind. 

This  arrangement,  besides  avoiding  a  sudden  stagnation  of  circulation,  will 
cause  a  considerable  proportion  of  whatever  loss  may  be  incident  to  the  es- 
tablishment, in  the  first  instance,  to  fall,  as  it  ought  to  do,  upon  the  govern- 
ment, and  will  probably  tend  to  distribute  the  remainder  of  it,  more  equally 
among  the  community. 

It  may,  nevertheless,  be  adviseable,  in  addition  to  the  precautions  here  sug- 
gested, to  repose  a  discretionary  authority  in  the  President  of  the  United 
States,  to  continue  the  currency  of  the  Spanish  dollar,  at  a  value  correspond- 
ing with  the  quantity  of  fine  silver  contained  in  it,  beyond  the  period  above- 
mentioned,  for  the  cessation  of  the  circulation  of  the  foreign  coins.  It  is 
possible,  that  an  exception  in  favor  of  this  particular  species  of  coin,  may- 
be found  expedient;  and  it  may  tend  to  obviate  inconveniences,  if  there  be  a 
power  to  make  the  exception,  in  a  capacity  to  be  exerted  when  the  period 
shall  arrive. 

The  Secretary  for  the  Department  of  State*,  in  his  report  to  the  House  of 
Representatives,  on  the  subject  of  establishing  a  uniformity  in  the  weights, 
measures,  and  coins  of  the  United  States,  has  proposed,  that  the  weight  of 
the  dollar  should  correspond  with  the  unit  of  weight.  This  was  done  on 
the  supposition  that  it  would  require  but  a  very  small  addition  to  the  quantity 
of  metal,  which  the  dollar,  independently  of  the  object  he  had  in  view,  ought 
to  contain;  in  which  he  was  guided  by  the  resolution  of  the  8th  of  August, 
1786,  fixing  the  dollar  at  375  grains  and  64  hundredths  of  a  grain. 

Taking  this  as  the  proper  standard  of  the  dollar,  a  small  alteration,  for 
the  sake  of  incorporating  so  systematic  an  idea,  would  appear  desirable. 
But,  if  the  principles  which  have  been  reasoned  from,  in  this  report,  are 
just,  the  execution  of  that  idea  becomes  more  difficult.  It  would  certainly 
not  be  adviseable  to  make,  on  that  account,  so  considerable  a  change  in  the 
money  unit,  as  would  be  produced  by  the  addition  of  five  grains  of  silver 
to  the  proper  weight  of  the  dollar,  without  a  proportional  augmentation  of  its 
21 


156  REPORTS  OF  THE  [1791. 

relative  value;  and  to  make  such  an  augmentation  would  be  to  abandon  the 
advantage  of  preserving  the  identity  of  the  dollar,  or  to  speak  more  accu- 
rately, of  having  the  proposed  one  received  and  considered  as  a  mere  sub- 
stitute for  the  present. 

The  end  ma}',  however,  be  obtained,  without  either  of  these  inconveniences, 
by  increasing  the  proportion  of  alloy  in  the  silver  coins.  But  this  would 
destroy  the  uniformity,  in  that  respect,  between  the  gold  and  silver  coins. 
It  remains,  therefore,  to  elect  which  of  the  two  systematic  ideas  shall  be 
pursued  or  relinquished;  and  it  may  be  remarked,  that  it  will  be  more  easy 
to  convert  the  present  silver  coins  into  the  proposed  ones,  if  these  last  have 
the  same,  or  nearly  the  same  proportion  of  alloy,  than  if  they  have  less. 
The  organization  of  the  Mint,  yet  remains  to  be  considered. 
This  relates  to-4he  persons  to  be  employed,  and  to  the  services  which  they 
are  respectively  to  perform.      It  is  conceived  that  there  ought  to  be — 

A  Director  of  the  Mint;  to  have  the  general  superintendence  of  the  busi- 
ness. 

An  Assay  Master,  or  Assayer;  to  receive  the  metals  brought  to  the  Mint, 
ascertain  their  fineness,  and  deliver  them  to  be  coined. 
A  Master  Coiner;  to  conduct  the  making  of  the  coins. 
A  Cashier;  to  receive  and  pay  them  out. 
An  Auditor;  to  keep  and  adjust  the  accounts  of  the  Mint. 
Clerks;  as  many  as  the  Directors  of  the  Mint  shall  deem  necessary,  to  as- 
sist the  different  officers. 

Workmen;  as  many  as  may  be  found  requisite. 
A  Porter. 

In  several  of  the  European  Mints,  there  are  various  other  officers,  but  the 
foregoing  are  those  only  who  appear  to  be  indispensable.  Persons  in  the 
capacity  of  clerks,  will  suffice  instead  of  the  others,  with  the  advantage  of 
greater  economy. 

The  number  of  workmen  is  left  indefinite,  because,  at  certain  times,  it  is 
requisite  to  have  more  than  at  others.  They  will,  however,  never  be  numer- 
ous. The  expense  of  the  establishment,  in  an  ordinary  year,  will  probably 
be  from  fifteen  to  twenty  thousand  dollars. 

The  remedy  for  errors  in  the  weight  and  alloy  of  the  coins,  must  necessa- 
rily form  a  part,  in  the  system  of  a  Mint;  and  the  manner  of  applying  it 
will  require  to  be  regulated.  The  following  account  is  given  of  the  practice 
in  England,  in  this  particular: 

A  certain  number  of  pieces  are  taken  promiscuously  out  of  every  fifteen 
pounds  of  gold,  coined  at  the  Mint,  which  are  deposited,  for  safe  keeping,  in 
a  strong  box,  called  the  pix.  This  box,  from  time  to  time,  is  opened  in 
the  presence  of  the  Lord  Chancellor,  the  officers  of  the  Treasur}^,  and  others, 
and  portions  are  selected  from  the  pieces  of  each  coinage,  which  are  melted 
together,  and  the  mass  assayed  by  a  jury  of  the  Company  of  Goldsmiths. 
If  the  imperfection  and  deficiency,  both  in  fineness  and  weight,  fall  short  of 
a  sixth  of  a  carat,  or  40  grains  of  pure  gold,  upon  a  pound  of  standard,  the 
master  of  the  Mint  is  held  excusable;  because,  it  is  supposed,  that  no  work- 
man can  reasonably  be  answerable  for  greater  exactness.  The  expediency 
of  some  similar  regulation  seems  to  be  manifest. 
All  which  is  humbly  submitted. 

ALEXANDER  HAMILTON, 

Secretary  of  the  Treasury. 


17 95. J       SECRETARY  OF  THE  TREASURY.         157 

PUBLIC  CREDIT,  No.  2. 

[Communicated  to  the  Senate,  2\st  January,  1795.] 

The  Secretary  of  the  Treasury  respectfully  makes  the  following  report  to 
the  Senate: 

The  President  of  the  United  States,  with  that  provident  concern  for  the 
public  welfare  which  characterizes  all  his  conduct,  was  pleased,  in  his  speech 
to  the  two  Houses  of  Congress  at  the  opening  of  the  present  session,  to  in- 
vite their  attention  to  the  adoption  of  a  definitive  plan  for  the  redemption 
of  the  public  debt,  and  to  the  consummation  of  whatsoever  may  remain  un- 
finished of  our  system  of  public  credit,  in  order  to  place  that  credit,  as  far 
as  may  be  practicable,  on  grounds  which  cannot  be  disturbed,  and  to  pre- 
vent that  progressive  accumulation  of  debt,  which  must  ultimately  en- 
dangerall  government. 

It  was,  at  the  same  time,  very  justly  intimated,  that  the  period  which  has 
elapsed  since  the  commencement  of  our  fiscal  measures,  (now  more  than 
four  years,)  has  so  far  developed  our  resources  as  to  open  the  way  to  the  im- 
portant work.  And  it  is  matter  of  solid  consolation,  that  the  result,  pre- 
senting a  state  of  our  finances  prosperous  beyond  expectation,  solicits  the 
public  councils  to  enter  with  zeal  and  decision  upon  measures  commensurate 
with  the  greatness  of  the  interests  to  be  promoted. 

Under  the  influence  of  this  conviction,  in  conformity  with  the  suggestions 
of  the  President,  and  pursuant  to  the  duty  which  the  constitution  of  the  de- 
partment, as  by  law  established,  enjoins  upon  the  Secretary  of  the  Treasu- 
ry, he  has  employed  himself  in  digesting  and  preparing  the  materials  of  a 
plan  for  the  attainment  of  the  invaluable  ends  which  are  recommended. 
And  he  now  respectfully  submits  them  to  the  consideration  of  Congress. 

Towards  a  clear  and  distinct  conception  of  the  means  necessary  to  the  ac^ 
complishment  of  those  ends,  it  will  be  useful,  in  the  first  place,  to  review 
what  has  been  heretofore  done.     This  will  be  presented  under  three  heads. 

1st.  The  revenues  which  have  been  established. 

2dly.  The  provisions  for  funding  the  debt,  and  for  the  payment  of  interest 
upon  it. 

3dly.    The  provisions  for  reimbursing  and  extinguishing  the  debt. 

The  revenues  which  have  been  established  appear  in  the  following  acts: 

1st.  "  An  act  for  laying  a  duty  on  goods,  wares,  and  merchandises,  imported 
into  the  United  States,"  passed  June  the  1st,  1789.  This  act,  as  its  title 
imports,  lays  various  specific  and  ad  valorem  rates  on  all  articles  (with  ex- 
ception of  a  few  useful  to  agriculture  and  manufactures,)  imported  from 
foreign  countries.  The  lowest  ad  valorem  rate  is  five  per  cent,  with  a  dis- 
count of  10  per  cent,  in  favor  of  our  own  bottoms.  The  duration  assigned 
these  duties  was  the  end  of  the  session  of  Congress  next  succeeding  the  first 
day  of  June,  1796. 

ad.   "  An  act  imposing  duties  on  tonnage,"  passed  July  20,  1789. 

This  act  lays  various  rates  of  duty  ori  the  tonnage  of  ships  and  vessels  en- 
tered in  the  United  States  from  foreign  countries,  and,  in  certain  cases,  in 
one  part  of  the  United  States  from  another. 


158  REPORTS  OF  THE  [1795. 

Its  duration  was  indefinite,  no  limit  having  been  assigned. 
3d.    "  An  act  imposing  duties  on  the  tonnage  of  ships  and  vessels,"  passed 
July  20,  1790. 

This  act  is  a  substitute  for  the  one  last  mentioned,  preserving  the  same 
rates  of  duty,  but  applying  them,  in  some  instances,  differently.  It  is,  like 
the  former,  of  indefinite  duration. 

4th.  "  An  act  making  further  provision  for  the  payment  of  the  debts  of 
the  United  States/'  passed  August  10,  1790. 

This  act  repeals,  after  the  last  of  December,  1790,  the  duties  on  imported 
articles,  laid  by  the  act  above  cited,  and  substitutes  new  and  generally  in- 
creased rates,  specific  and  ad  valorem. 

The  lowest  ad  valorem  rate  in  this,  as  in  the  former  act,  is  five  per  cent. ; 
but  the  number  of  articles  to  which  it  applies  is  much  narrowed,  and  instead 
of  a  discount  in^favor  of  our  own  bottoms,  an  addition  of  ten  per  cent,  is 
made  to  the  disadvantage  of  foreign  bottoms. 

The  number  of  free  articles  is  somewhat  extended,  in  further  encourage- 
ment of  agriculture  and  manufactures. 

It  is  declared,  that  the  duties  laid  by  this  act  shall  continue  till  the  debts 
and  purposes  for  which  they  are  appropriated  shall  be  satisfied;  reserv- 
ing, however,  a  right  to  Congress  to  substitute  other  duties  or  taxes  of 
equal  value. 

5th.  "  An  act  to  incorporate  the  subscribers  to  the  Bank  of  the  United 
States,"  passed  the  25th  of  February,  1791. 

The  second  section  of  this  act  authorizes  the  President  to  cause  a  subscrip- 
tion to  be  made  to  the  stock  of  the  bank,  on  account  of  the  United  States,  to 
the  amount  of  g2, 000, 000;  and  with  a  view  to  the  accomplishment  of  that 
object,  to  borrow  of  the  bank  $2,000,000,  to  be  reimbursed  in  ten  equal 
yearly  instalments. 

The  difference  between  the  interest  payable  on  the  loan,  and  the  dividends 
on  the  stock,  constitutes  an  item  of  annual  income  to  the  United  States.  It 
is  unappropriated. 

6th.  "  An  act  repealing,  after  the  last  day  of  June  next,  the  duties  here- 
tofore laid  upon  distilled  spirits  imported  from  abroad,  and  laying  others 
in  their  stead;  and,  also,  upon  spirits  distilled  within  the  United  States,  and 
for  appropriating  the  same,"  passed  the  3d  of  March,  1791. 

This  act,  in  conformity  with  its  title,  repeals,  after  June,  1791,  the  duties 
on  imported  spirits,  laid  by  the  act  of  the  10th  of  August,  1790,  and  estab- 
lishes, in  lieu  of  them,  higher  rates,  namely,  from  20  to  40  cents  per  gallon, 
according  to  proof.  It  also  lays  duties,  to  commence  at  the  same  time,  upon 
spirits  distilled  within  the  United  States,  namely,  on  those  from  foreign 
materials,  from  11  to  30  cents,  according  to  proof;  on  those  from  do- 
mestic materials,  if  distilled  in  cities,  towns,  or  villages,  from  9  to  25  cents 
per  gallon,  according  to  proof;  if  distilled  in  other  places,  it  imposes  a  yearly 
rate  of  60  cents  per  gallon  of  the  capacity  of  each  still,  with  an  option  to 
the  distiller  to  keep  and  render  an  account  of  the  produce  of  his  still,  and  to 
pay  nine  cents  per  gallon  of  the  quantity  of  spirits  distilled  therein. 

These  duties  are  appropriated,  primarily,  in  the  same  manner,  and  to 
the  same  purposes,  as  those  laid  on  imported  articles  by  the  act  of  the 
10th  of  August,  1790,  and  are  to  continue  for  the  same  time,  with  the 
like  reservation  of  a  right  to  substitute  other  duties  or  taxes  of  equal  value* 
There  is  a  further  appropriation,  which  will  be  noticed  hereafter. 


1795.]  SECRETARY  OF  THE  TREASURY.  159 

7th.  "  An  act  for  raising  a  further  sum  of  money  for  the  protection  of  the 
frontiers,  and  for  other  purposes  therein  mentioned,"   passed  May  2,  1792. 

This  act  repeals,  after  June,  1792,  the  former  duties  on  a  number  of  im- 
ported articles,  and  establishes  higher  duties  in  their  stead. 

It  extends,  among  other  things,  the  duties  on  foreign  distilled  spirits,  lay- 
ing on  those  made  fro?n  grain  28  to  50  cents  per  gallon;  on  others,  25  to 
46  cents  per  gallon.  The  appropriation  and  duration  of  these  new  duties 
are  conformable  and  co-extensive  with  those  repealed.  There  is,  likewise, 
an  addition  of  25  per  cent,  to  that  class  of  duties  ad  valorem,  which,  before, 
was  rated  at  5  per  cent. ;  but  this  additional  duty  is  limited  to  the  term  of 
two  years. 

Out  of  the  surplus  of  these  duties,  after  satisfying  the  permanent  appro- 
priations, certain  gross  sums  are  appropriated  for  the  service  of  the  War 
Department. 

8th.  "  An  act  concerning  the  duties  on  spirits  distilled  within  the  United 
States,"  passed  May  8,  1792. 

This  act  repeals,  after  the  last  day  of  June,  1792,  the  former  duties  on 
spirits  distilled  within  the  United  States,  and  on  stills,  and,  instead  of  them, 
establishes  lower  duties,  namely,  on  those  made  of  foreign  materials,  from 
10  to  25  cents  per  gallon,  according  to  proof;  on  those  made  of  domestic 
materials,  if  in  cities,  towns,  or  villages,  or  at  distilleries  where  the  stills, 
singly  or  together,  are  of  the  capacity  of  400  .gallons,  or  upwards,  from  7 
to  18  cents  per  gallon,  of  the  spirits  distilled,  according  to  proof;  if  made  in 
other  places,  or  at  distilleries  where  the  stills  are  of  inferior  capacity,  the 
yearly  rate  of  54  cents  per  gallon,  of  the  capacity  of  each  still.  A  new  op- 
tion is  given  to  the  distiller,  which  is,  instead  of  paying  the  yearly  rate,  to 
take  out  licenses  for  the  monthly  employment  of  his  stills,  paying,  each 
time,  10  cents  per  gallon  of  the  capacity  of  each  still. 

These  new  duties  are  appropriated  in  the  same  manner,  and  for  the 
same  purposes,  and  are  to  continue  for  the  same  time,  as  those  for 
which  they  are  substitutes;  and  to  make  good  any  deficiency  which  may 
accrue  from  lowering  the  rates,  the  surplus  of  the  duties  imposed  by  the 
act  of  the  second  of  the  same  month  is  appropriated. 

"  An  act  to  promote  the  progress  of  useful  arts,  and  to  repeal  the  act  here- 
tofore made  for  that  purpose,"  passed  February  21,  1793. 

This  act  ordains  certain  fees  to  be  paid,  by  persons  to  whom  patents  are 
granted,  for  inventions,  discoveries,  or  improvements,  and  appropriates 
them  to  the  purpose  of  defraying  Clerk  hire  in  the  Department  of  State. 
Its  duration  is  indefinite. 

9th.  '<An  act  to  establish  the  Post  Office  and  Post  Roads,  within  the 
United  States,"  passed  May  8,  1794. 

This  act  establishes,  to  commence  on  the  first  of  June  following,  various 
rates  of  postage  on  letters,  and  directs,  that  the  Postmaster  shall  render  to 
the  Treasury  Department,  a  quarterly  account  of  Receipts  and  Expenditures, 
and  shall  pay,  quarterly,  into  the  Treasury,  the  balance  in  his  hands. 

The  duration  of  this  act  is,  also,  indefinite.  It  contains  no  appropriation 
of  the  sums  paid  into  the  Treasury. 

10th.  "  An  act  laying  duties  upon  carriages  for  the  conveyance  of  per- 
sons," passed  June  5,  1794. 

This  act  lays  different  rates  of  duty,  from  ten  dollars  down  to  one  dollar, 
upon  carriages  for  the  conveyance  of  persons,  kept  by  or  for  any  person, 
for  his  or  her  own  use,  or  to  be  let  to  hire,  or  for  the  conveying  of  passen- 
gers; and  to  guard  against  misapprehension,  declares,  that   the  duties  shall, 


16q  REPORTS  GF  THE  [1795. 

not  be  construed  to  extend  to  any  carriage  usually  and  chiefly  employed 
in  husbandry,  or  for  the  transporting  or  carrying  of  goods,  wares,  mer-  ■ 
chandise,  produce,  or  commodities. 

The  duration  of  the  duties  is  limited  to  the  end  of  the  session  of  Congress 
which  shall  be  next  after  the  term  of  two  years  from  the  time  of  passing  the 
act.     It  contains  no  appropriation. 

11th.  "  An  act  laying  duties  on  licenses  for  selling  wines  and  foreign  dis- 
tilled spirituous  liquors,  by  retail,"  passed  June  5,  1794. 

This  act  requires,  that  every  retail  dealer  in  wines,  shall  take  out  a  yearly 
license,  and  shall  pay  for  it  a  duty  of  five  dollars;  and  that  every  retail  dealer 
in  foreign  distilled  spirituous  liquors,  shall  also  take  out  a  yearly  license, 
and  pay  for  it  a  duty  of  five  dollars.  It  defines  a  retail  dealer  in  wines,  to  be 
a  person  who  deals  in  the  selling^f  wines,  to  be  carried  or  sent  out  of  the 
house,  building,  or  place  of  his  or  her  dwelling,  in  less  quantities  at  one 
time  than  thirty  gallons,  except  in  the  original  cask,  case,  box,  or  package, 
in  which  it  is  imported.  A  retail  dealer  of  spirituous  liquors  to  be  a  per- 
son who  shall  deal  in  the  selling  of  foreign  distilled  spirituous  liquors,  to  be 
carried  or  sent  out  of  the  house,  building,  or  place  of  his  or  her  dwelling, 
in  less  quantities  than  twenty  gallons,  at  one  time.  No  difference  is  made 
■between  the  dealer  in  several  kinds  of  wines,  or  several  kinds  of  foreign 
distilled  liquors,  and  the  dealer  in  one  kind. 

The  same  duration  is  assigned  to  this  act,  as  to  the  one  last  cited.  It  is 
-equally  without  an  appropriation. 

12th.  An  act  laying  certain  duties  upon  snuff,  and  refined  sugar,"  passed 
June  5,  1794. 

This  act  lays  a  duty  of  S  cents  per  pound,  on  all  snuflf,  which,  after  the 
30th  of  September,  1794,  should  be  manufactured  within  the  United  States, 
and  of  2  cents  per  pound,  on  all  sugar,  which,  after  that  day,  should  be  re- 
fined within  the  United  States.  The  remark  made  upon  the  two  last  recited 
acts,  is  applicable  to  this,  as  to  the  duration  of  the  duties,  and  the  appropria- 
tion of  their  proceeds. 

13th.  ;'  An  act  laying  additional  duties  on  goods,  wares,  and  merchandises, 
imported  into  the  United  States,"  passed  June  7,  1794. 

This  act  la}^s  upon  sundry  enumerated  articles,  on  their  importation  from 
foreign  countries,  certain  specific  and  ad  valorem  rates  of  duty,  in  addition 
to  those  before  charged  upon  them,  and  adds  generally,  a  duty  of  two  and  a 
half  per  centum,  on  all  that  class  of  articles  which  were  before  chargeable 
with  seven  and  a  half  per  centum  ad  valorem.  It  also  prolongs  the  tempo- 
rary two  and  a  half  per  centum,  laid  by  the  act  of  May  2,  1792,  till  the 
first  of  January,  1797,  to  which  period  the  other  duties  laid  by  it  are  to  con- 
tinue.    It  contains  no  appropriation. 

14th.  "An  act  laying  duties  on  property  sold  at  auction,"  passed  June  9, 
1794. 

This  act  lays  a  duty  on  sales  at  auction,  by  persons  licensed  according  to 
the  laws  of  a  State,  or  this  act  prohibiting  others  from  selling  at  auction,  of 
5  per  cent,  of  the  purchase  money,  arising  from  the  sale  of  any  right,  inter- 
est, or  estate,  in  lands,  tenements,  or  hereditaments,  utensils  in  husbandry, 
farming  stock,  or  ships  and  vessels,  of  §  per  cent,  of  the  purchase  money, 
arising  from  the  sales  of  any  other  goods,  chattels,  rights,  or  credits. 

The  term  of  these  duties  is  limited  to  the  end  of  the  session  next  after 
the  expiration  of  two  years  from  the  time  of  passing  the  act,  which  also  is 
without  an  appropriation. 


1795.1  SECRETARY  OF  THE  TREASURY.  jgj 

But,  by  an  act,  entitled  An  act  making  appropriations  for  certain  purposes 
therein  expressed,"  passed  the  same  9th  of  June,  1794,  certain  specific 
sums,  amounting  together  to  1,292, 1 37  dollars  38  cents,  are  charged  upon-  the 
proceeds  of  the  revenues,  which  are  created  by  the  five  last  mentioned  acts, 
and  there  is  a  reservation  made  out  of  them  of  a  sum  sufficient  to  pay  the 
interest  of  whatever  moneys  may  be  borrowed  pursuant  to  the  act  entitled 
"  An  act  making  further  provision  for  the  expenses  attending  the  inter- 
course of  the  United  States  with  foreign  nations,"  &c.  passed  the  20th  of 
March,  1794,  which  sum  is  pledged  for  the  payment  of  that  interest. 

These  acts  comprehend  all  the  current  revenues  of  the  United  States. 
Their  product  will  appear  hereafter. 

In  addition  to  them  a  fund  will  be  derived  from  the  sale  of  the  public  lands 
in  the  Western  Territory.  And  there  likewise  occur,  from  time  to  time, 
payments  into  the  Treasury  on  account  of  old  debts;  but  these  are  too  ca- 
sual, and  of  too  little  magnitude,  to  be  more  than  cursorily  mentioned. 

The  lands  in  the  Western  Territory,  Of  which  the  government  of  the 
United  States  has  acquired  the  right  of  soil,  are  estimated  in  a  report  of  the 
late  Secretary  of  State,  to  amount  to  21,000,000  of  acres.  This  quantity, 
at  twenty  cents  per  acre,  the  price  upon  former  occasions  contemplated, 
would  yield  a  sum  of  $  4,200,000.  But  it  is  believed  that  it  would  be  un- 
safe to  count  upon  so  large  a  sum.  Besides  the  uncertainty  as  to  the  pro- 
portion which  may  be  of  a  saleable  quality,  and  as  to  the  price  which  may 
be  obtained  for  it,  the  boundary  line  between  the  United  States  and  the  In- 
dians is  understood  to  be  unsettled  with  regard  to  a  large  part  of  the  tract 
on  which  the  computation  is  made.  If  it  ultimately  yields  three  millions 
of  dollars,  it  will  probably  equal  every  reasonable  expectation. 

The  provisions  for  funding  the  debt,  and  for  payment  of  interest  upon  it, 
are  comprised  in  the  following  acts: 

1.  "An  act  making  provision  for  the  debt  of  the  United  States,"  passed 
August  4,  1790. 

This  act,  commonly  called  the  funding  act,  contains  these  several  pro- 
visions, viz. 

1st.  It  reserves  out  of  the  proceeds  of  the  duties  on  imports  and  tonnage, 
for  the  support  of  the  government  of  the  United  States,  and  their  common 
defence,  the  yearly  sum  of  600,000  dollars. 

2d.  It  appropriates  so  much  of  the  same  proceeds  as  should  be  necessary , 
to  the  payment  of  interest  on  foreign  loans,  before  that  time  contracted,  or 
which  should  afterwards  be  contracted,  for  discharging  the  arrears  of  inte- 
rest, and  the  principal  of  antecedent  foreign  loans,  to  continue  so  appropri- 
ated till  the  debt  created  by  those  loans  should  be  fully  discharged. 

3d.  It  authorizes  the  President  to  borrow  any  sum  or  sums  not  exceeding 
$12,000,000,  to  discharge  the  arrears  of  interest  upon,  and  the  instalments 
of  the  principal  of,  the  foreign  debt,  due  and  to  grow  clue;  and  if  to  be  ef- 
fected on  advantageous  terms,  to  pay  off  the  whole  of  that  debt;  and  fur- 
ther authorizes  him  to  make  such  other  contracts  respecting  it  as  should  be 
found  for  the  interest  of  the  United  States,  so  that  no  engagement  or  con- 
tract should  preclude  from  reimbursing  the  sums  borrowed  within  fifteen 
years  after  they  should  be  borrowed. 

4th.  In  order  to  adapt  the  form  of  the  domestic  debt  to  the  then  circum- 
stances of  the  United  States,  as  far  as  should  be  found  practicable,  "  con~ 
sistently  with  good  faith  and  the  rights  of  the  creditors,  which  it  truly 
declares  "  could  only  be  done  by  a  voluntary  loan  on  their  part;"  it 
proposes  a  loan  to  the  United  States,  (directing  for  that  purpose  books  for 


162  REPORTS  OF  THE  [1795. 

subscriptions  to  be  opened  at  the  Treasury,  and  by  Commissioners  of  Loans 
in  the  several  States,  on  the  1st  of  October,  1790,  and  to  continue  for  a 
year,)  the  sums  subscribed  to  the  loan  to  be  paid  in  certain  enumerated  evi-1 
dences  of  the  debt  of  the  United  States,  upon  these  terms,  viz. 

1st.  That  the  interest  unpaid  on  the  principal  of  those  evidences,  should 
be  computed  up  to  the  last  of  December,  1790. 

2d.  That  for  any  sum  subscribed  and  paid  in  the  principal  of  the  debt, 
the  subscriber  should  be  entitled  to  one  certificate  for  a  sum  equal  to  two- 
thirds  of  the  sum  subscribed,  bearing  an  interest  of  6  per  cent,  per  annum, 
commencing  the  1st  day  of  January,  1791,  payable  quarter  yearly,  and 
subject  to  redemption  by  payments  not  exceeding  in  one  year,  on  account 
both  of  principal  and  interest,  eight  dollars  upon  a  hundred  of  the  origin- 
al sum  so  subscribed  and  paid;  and  to  another  certificate  for  a  sum  equal 
to  the  remaining  third  of  that  sum,  which,  after  the  year  1S00,  should  bear 
a  like  interest,  payable  in  like  manner,  and  subject  to  a  like  rate  of  redemp- 
tion. But  that  the  United  States,  though  having  a  right  to  redeem  in  the 
above-mentioned  proportion,  should  not  be  obliged  to  do  it. 

3d.  That  for  any  sum  subscribed  and  paid  in  the  interest  of  the  debt,  the 
subscriber  should  be  entitled  to  a  certificate  for  a  sum  equal  to  the  sum  sub- 
scribed, bearing  an  interest  of  3  per  cent,  per  annum,  from  the  said  last  day 
of  December,  1790,  payable  quarter  yearly,  and  redeemable  at  pleasure,  by 
payment  of  the  principal.  - 

4th.  That  the  new  stock  created  by  the  said  loan  should  be  transferable  on 
the  books  upon  which  the  credit  for  it  should  stand  by  the  proprietor  or 
his  attorney;  these  books  to  be  either  those  kept  for  the  purpose  at  the 
Treasury,  or  by  Commissioners  of  Loans  in  the  respective  States;  a  mode 
being  provided  for  the  transfer  from  the  books  at  one  place  to  those  at 
another. 

5th.  That  the  interest  should  be  payable  wheresoever  the  creditfor  the  stock 
should  exist,  when  the  payment  of  interest  should  become  due;  except  that 
the  dividend  of  interest  for  any  quarter  of  a  year  which  should  not  be  de- 
manded before  the  expiration  of  a  third  quarter,  should  afterwards  be  de- 
mandable  only  at  the  Treasury. 

6th.  That  for  the  regular  payment  of  the  interest  on  the  several  kinds  of 
stock,  to  arise  from  the  loan,  as  it  should  accrue,  including  that  which  is 
deferred,  the  proceeds  of  the  public  revenues,  which  before  that  time  had 
been,  or  during  the  then  session  should  be  provided,  after  reserving  yearly 
600,000  dollars  for  the  support  of  the  government  of  the  United  States 
and  their  common  defence,  and  such  sum  as  should  be  necessary  for  pay- 
ment of  interest  on  the  foreign  loansbef ore-mentioned,  should  be.  and  there- 
by were,  pledged  and  appropriated  till  the  final  redemption  of  the  capital 
stock. 

V.  Premising  that  some  of  the  creditors  of  the  United  States  might  not 
think  fit  to  become  subscribers  to  the  loan,  this  act  declares  that  "  nothing 
contained  in  it  should  be  construed  in  any  wise  to  alter,  abridge,  or 
impair,  the  rights  of  those  creditors  of  the  United  States  who  should 
not  subscribe  to  the  loan,  or  the  contracts,  upon  which  their  respective 
claims  are  founded,  but  that  the  said  contracts  and  rights  should  remain 
in  full  force  and  virtue."  And  to  obviate  all  idea  of  compulsion  on  the  cre- 
ditors to  subscribe,  it  allows  to  non-subscribers,  during  the  pendency  of  the 
loan,  and  until  the  end  of  the  year  1791,  a  rate  per  centum  on  their  respective 
demands,  equal  to  that  which  is  paid  to  subscribing  creditors;  on  the  sole  con- 
dition, that,  the  evidences  of  debt  holden  by  them,  except  those  which  had 


1795.]  SECRETARY  OF  THE  TREASURY.  163 

been  issued  by  the  Register  of  the  Treasury  for  the  registered  debt,  should 
be  exchanged  for  other  certificates  specifying  the  specie  amount  of  those 
in  exchange  for  which  they  were  given,  and  otherwise  of  the  like  tenor 
with  those  which  had  theretofore  been  issued  by  the  Register  of  |:he  Trea- 
sury for  the  registered,  debt;  stating,  as  the  grounds  of  this  condition,  that 
some  of  the  certificates  then  in  circulation,  had  not  been  liquidated  to  specie 
value;  that  most  of  them  were  greatly  subject  to  counterfeit;  that  counter- 
feits had  actually  taken  place  in  numerous  instances;  and  that  embarrass- 
ment and  imposition  might  attend  the  payment  of  interest  on  these  certifi- 
cates in  their  then  form. 

VI.  This  act  likewise  proposes  another  loan  to  the  amount  of  $21,500,000, 
payable  in  the  principal  and  interest,  indiscriminately  of  the  evidences  of 
debt  of  the  respective  States,  according  to  certain  quotas,  to  be  conducted  in 
the  same  manner,  and  to  be  open  for  the  same  time,  as  that  in  the  domestic 
debt  of  the  United  States.     The  terms  of  this  loan  to  be — 

1st.  That  for  any  sum  subscribed,  the  subscriber  should  be  entitled  to  one 
certificate  for  a  sum  equal  to  four-ninths  of  the  subscribed  sum,  bearing  an 
interest  of  six  per  centum  per  annum,  commencing  the  1st  day  of  January, 
1791.  To  another  certificate  for  a  sum  equal  to  two-ninths  of  the  said  sub- 
scribed sum,  bearing  an  interest  after  the  year  1800,  of  six  per  centui"  per 
annum;  and  to  a  third  certificate,  for  a  sum  equal  to  three-ninths  of  the  said 
subscribed  sum,  bearing  an  interest  of  three  per  centum  per  annum,  com- 
mencing on  the  same  first  day  of  January,  1791:  the  interest  in  each  case 
to  be  payable  in  like  manner,  and  to  be  subject  to  the  like  redemption  as 
that  on  the  correspondent  kinds  of  stock  to  be  created  by  this  the  said 
first  mentioned  loan.  And  the  stock  to  be  created  by  this  second  loan,  to 
be  transferable  on  the  same  principles,  and  in  the  same  modes,  as  that  pro- 
duced by  the  former. 

2d.  That  for  the  regular  payment  of  interest  on  the  several  kinds  of  stock 
to  arise  from  this  loan,  as  it  should  accrue,  including  that  which  is  deferred, 
the  proceeds  of  the  public  revenues,  which,  before  that  time,  had  been,  or 
during  the  then  session  should  be  provided,  after  reserving  the  aforesaid 
yearly  sum  of  $600,000,  the  sum  necessary  for  payment  of  interest  on 
the  foreign  loans,  made  and  to  be  made,  and  the  sum  necessary  for  pay- 
ment of  interest  on  the  loan  in  the  domestic  debt,  should  be,  and  thereby 
were  pledged  and  appropriated;  to  continue  so  pledged  and  appropriated, 
until  the  final  redemption  of  the  capital  stock. 

VII. '  To  secure  the  due  application  of  these  revenues,  according  to  the 
appropriations,  an  account  of  them  is  directed  to  be  kept,  distinct  from  that 
of  the  proceeds  of  any  other  revenues,  except  such  as  should  be  raised  to 
make  good  a  deficiency  in  those;  and  the  faith  of  the  United  States  is  pledged 
to  appropriate  additional  and  permanent  funds  for  satisfying  such  deficiency. 
VIII.  The  proceeds  of  the  sales  of  lands  in  the  Western  Territory,  then 
belonging,  or  which  thereafter  should  belong  to  the  United  States,  are 
pledged  and  appropriated  for  the  discharge  of  the  debts  which  the  United 
States  then  owed,  or  by  virtue  of  that  act  should  owe. 

There  are  several  collateral  and  supplementary  provisions,  which  are 
omitted  as  immaterial  to  the  intended  view  of  the  subject. 

II.  An  act  repealing,  after  the  last  day  of  June  next,  the  duties  hereto- 
fore laid  upon  distilled  spirits,  &c,  passed  the  3d  of  March,  1791. 

The  proceeds  of  the  duties  laid  by  this  act,  are  made  subject  to  the  same 
appropriations,  and  in  the  same  order  of  priority  as  those  contained  in  the 
22 


jg4  REPORTS  OF  THE  [1795. 

funding  act;  and  to  secure  their  due  application,  an  account  is  directed  to  be 
kept  of  them,  distinct  from  that  of  any  other  revenues,  except  those  ap- 
propriated by  the  funding  act. 

III.  An  act  for  raising  a  further/sum  of  money  for  the  protection  of  fron- 
tiers, &c,  passed  May  2d,  1792. 

This  act,  which, ashas  been  before  noticed,  increased  permanently  the  duties 
on  certain  imported  articles,  and  laid  a  temporary  additional  duty  on  some 
others,  appropriates  primarily  the  proceeds  of  the  permanent  augmentations 
in  the  same  manner,  and  to  the  same  purposes,  as  the  antecedent  duties  were 
appropriated;  that  is,  in  conformity  with  the  funding  act. 

IV.  An  act  concerning  the  duties  on  spirits  distilled  within  the  United 
States,  passed  May  8th,  1792. 

This  act,  which  lowers  the  duties  on  spirits  distilled  within  the  United. 
States,  and  on  stills,  appropriates  the  proceeds  of  the  reduced  duties  in  the 
same  manner  as  were  the  former  duties;  and  to  make  good  whatever  defi- 
ciency might  be  occasioned  by  the  reduction  of  the  rates,  pledges  as  a  sub- 
stitute the  surplus  of  the  augmented  duties  laid  by  the  last  cited  act. 

V.  An  act  providing  for  the  payment  of  the  second  instalment,  due  on  a 
loan  made  of  the  Bank  of  the  United  States,  passed  June  4th,  1794. 

This  act,  in  addition  to  a  provision  for  paying  that  second  instalment,  ap- 
propriates so  much  of  the  dividends  on  the  stock  which  the  United  States 
hold  in  the  bank,  as  should  be  necessary  to  the  payment  of  interest  on  the 
capital  of  a  loan  of  $2,000,000,  had  of  the  bank,  pursuant  to  the  11th  sec- 
tion of  the  act  by  which  it  is  incorporated.  It  also  fixes  the  last  day  of 
December,  in  each  year,  as  the  annual  period  for  the  payment  of  the  succes- 
sive instalments  of  that  loan. 

VI.  An  act  making  provision  for  the  payment  of  the  interest  on  the 
balances  due  to  certain  States,  upon  a  final  settlement  of  accounts  between 
the  United  States  and  the  individual  States;  passed  May  30th,  1794. 

This  act  directs,  that  interest  shall  be  allowed  and  computed  on  the  bal- 
ances to  creditor  States,  from  the  last  of  December,  1789,  to  the  last  of 
December,  1794;  which,  being  placed  to  their  credit  respectively,  shall  bear 
an  interest  of  three  per  centum  per  annum,  from  the  period  last  mentioned. 

It  further  directs,  that  the  interest  on  the  principal  balances,  to  be  funded 
agreeably  to  the  terms  of  the  act  for  the  settlement  of  accounts,  together 
with  the  interest  upon  the  arrears  of  interest,  computed  on  those  balances, 
and  forming  a  new  capital,  shall  be  payable  at  the  offices  of  the  Commis- 
sioners of  Loans,  within  the  States  to  which  the  balances  are  respectively 
due,  and  shall  be  paid  quarter -yearly,  after  the  last  day  of  December,  1794, 
at  the  same  epochs  in  each  year,  at  which  interest  is  payable  on  the  other 
parts  of  the  funded  debt;  to  which  end,  so  much  of  the  proceeds  of  the  du- 
ties on  imports  and  tonnage  as  may  be  necessary,  and  as  were  not  other- 
wise previously  appropriated,  are  appropriated;  and  the  faith  of  the  United 
States  is  pledged,  to  provide  for  any  deficiency  which  may  happen  by  ad- 
ditional and  permanent  funds. 

There  are  several  acts  which  prolong,  from  time  to  time,  the  subscriptions 
in  the  domestic  and  State  debts,  on  the  same  terms  as  by  the  funding  actj 
those  in  the  domestic  debt  being  continued  down  to  the  last  day  of  Decem- 
ber, 1794;  which  acts,  together  with  the  acts  particularly  cited,  comprise 
all  those  that  relate  to  the  funding  of  the  public  debt,  and  the  payment  of 
interest  thereupon.  The  result  of  these  acts  is  exhibited  in  the  tables  A, 
B,  C,  and  D,  which  show  the  amount  of  the  foreign  debt;  that  of  the  funded 
debt,  the  probable  amount  of  that  which  remains  unfunded,  of  what  com- 


1795.]  SECRETARY  OF  THE  TREASURY.  165 

posed,  and  the  annual  amount  of  interest  upon  the  different  portions  of  debt, 
according  to  contract,  and  according  to  the  plan  of  this  report. 

The  provisions  for  reimbursing  and  redeeming  the  public  debt,  are  con- 
tained in  the  following  acts,  and  are  as  follow,  viz: 

I.  tl  An  act  making  provision  for  the  debt  of  the  United  States,"  passed 
the  4th  of  August,  1790. 

This  act,  which  is  the  one  that  regulates  the  funding  of  the  debt,  by  the 
last  section  appropriates  the  proceeds  of  the  sales  of  lands  in  the  Western 
Territory,  then  belonging,  or  thereafter  to  belong  to  the  United  States,  to 
the  sinking  or  discharging  of  the  debts  for  which  the  United  States  then 
were,  or  by  virtue  of  that  act  should  be  holden,  to  be  applied  solely  to  that 
use,  until  they  should  be  fully  satisfied. 

II.  "An  act  making  provision  for  the  reduction  of  the  public  debt," 
passed  August  12th,  1790. 

This  act,  premising  that  it  is  desirable,  by  all  just  and  proper  means,  to 
effect  a  reduction  of  the  public  debt,  and  that  the  application  of  the  surplus 
revenue  to  that  object,  will  not  only  contr  bute  to  this  desirable  end,  but 
will  be  beneficial  to  the  creditors  of  the  United  States,  by  raising  the  price 
of  their  stock,  and  be  productive  of  considerable  saving  to  the  United 
States,  enacts — 

1st.  That  the  surplus  of  the  duties  on  imports  and  tonnage  to  the  end  of 
the  year  1790,  shall  be  applied  to  the  purchase  of  the  debt  of  the  United 
States,  at  its  market  price,  if  not  exceeding  the  par  or  true  value  thereof. 

2d.  That  the  purchases  to  be  made,  shall  be  conducted  under  the  direction 
of  the  President  of  the  Senate,  the  Chief  Justice,  the  Secretary  of  State, 
the  Secretary  of  the  Treasury,  and  the  Attorney  General;  who,  or  any  three 
of  whom,  with  the  approbation  of  the  President,  are  authorized  to  cause 
them  to  be  made,  in  such  manner,  and  under  such  regulations,  as  shall  ap- 
pear to  them  best  calculated  to  fulfil  the  intent  of  this  act:  Provided,  that 
the  same  should  be  made  openly,  and  with  due  regard  to  the  equal  benefit 
of  the  several  States. 

3d.  That  the  accounts  of  the  application  of  the  fund  should  be  settled  as 
other  public  accounts,  accompanied  with  returns  of  the  amount  of  debt  pur- 
chased at  the  end  of  each  quarter  of  a  year;  and  that  a  full  and  exact  report 
of  the  proceedings  of  the  Commissioners  should  be  laid  before  Congress, 
within  the  first  fourteen  days  of  each  session,  including  a  statement  of  the 
disbursements  and  purchases ;  specifying  the  times  when,  prices  at  which, 
and  persons  of  whom,  the  purchases  were  made. 

4th.  That  in  addition  to  this  fund,  the  President  should  be  authorized  to 
borrow  any  sum  or  sums,  not  exceeding  2,000,000  of  dollars,  at  an  interest 
not  exceeding  five  per  centum,  to  be  applied  to  purchases  of  public  debt,  in, 
like  manner,  and  under  the  same  direction  and  regulations  as  the  first  men- 
tioned fund:  Provided,  that  out  of  the  interest  f  the  debt'io  be  purchased, 
there  should  be  appropriated  annually  a  sum  not  exceeding  eight  per 
centum  of  the  sums  borrowed,  towards  paying  the  interest  and  reim- 
bursing the  principal  of  these  sums. 

But  to  guard  against  the  possibility  of  a  deficiency  of  means  to  pay  the  in- 
terest on  the  debt  which  was  to  accrue  in  the  year  1791,  authority  is  given 
to  reserve  and  apply  to  that  purpose,  out  of  the  first  mentioned  fund,  as 
much  as  might  be  necessary  to  supply  the  defect  of  receipts  during  that  year, 
on  account  of  the  duties  which  should  accrue  after  the  year  1790. 

III.  An  act  repealing,  after  the  last  day  of  June  next,  the  duties  heretofore 
laid  upon  distilled  spirits,  &c.  passed  the  3d  of  March,  1791. 


166  REPORTS  OF  THE  [1795. 

This  act  appropriates  whatever  surplus  may  remain  from  year  to  year  of 
the  proceeds  of  the  duties  which  it  imposes,  after  satisfying  prior  appropria- 
tions, to  the  reduction  of  the  public  debt,  unless  such  surplus  shall  be  re- 
quired for  the  current  public  exigencies,  and  by  special  acts  of  Congress 
shall  be  appropriated  thereto. 

IV.  An  act  supplementary  to  the  act  making  provision  for  the  reduction 
of  the  public  debt;  passed  the  3d  day  of  March,  1791. 

This  act  declares  that  the  terms  of  a  loan  of  three  millions  of  florins,  ob- 
tained in  Holland,  bearing  five  per  cent,  interest,  and  four  and  a  half  per  cent, 
for  charges,  and  future  loans  on  the  same  terms,  should  be  deemed  to  be 
within  the  meaning  of  the  act  of  the  12th  of  August,  1790. 

V.  An  act  supplementary  to  the  act  making  provision  for  the  debt  of  the 
United  States,  passed  May  S,  1792. 

This  act  makes  provision  for  the  payment  of  a  debt  due  to  certain  foreign 
officers  who  had  served  the  United  States,  (the  interest  of  which  was  by 
stipulation  payable  at  Paris,)  out  of  the  moneys  authorized  to  be  borrowed 
by  the  funding  act.  It  also  establishes  a  permanent  Sinking  Fund,  to  be 
composed, 

1st,  Of  the  interest  of  the  public  debt  purchased,  redeemed,  or  paid  into 
the  Treasury,  in  satisfaction  of  any  debt  or  demand. 

2d,  Of  the  surplus,  if  any,  which  should  remain  of  moneys  appropriated 
for  paying  the  interest  of  the  public  debt,  after  paying  that  interest. 

This  fund  is  to  be  applied,  under  the  direction  of  the  Commissioners  nomi- 
nated in  the  act  of  the  12th  of  August,  with  the  like  approbation  of  the  Pre- 
sident, 

1st.  To  the  purchase  of  the  several  species  of  stock  constituting  the  debt 
of  the  United  States,  at  their  respective  market  prices,  not  exceeding  the 
par  or  true  value  thereof,  and  as  nearly  as  may  be  in  equal  proportions, 
until  the  annual  amount  of  the  fund  shall  be  equal  to  two  per  centum 
of  the  whole  amount  of  the  outstanding  funded  stock,  bearing  a  present 
interest  of  six  per  centum : — Thenceforth, 

2d.  To  the  redemption  of  that  stock,  according  to  the  right  reserved  to 
the  United  States,  until  the  whole  should  be  redeemed:  and  lastly,  after 
such  redemption,  to  the  purchase,  at  its  market  price,  of  any  unredeemed 
debt  of  the  United  States;  which  purchases  are  directed  to  be  made  at  the 
lowest  prices  at  which  they  can  be  effected  by  open  purchase,  or  by  receiv- 
ing sealed  proposals,  to  be  opened  in  the  presence  of  the  Commissioners,  or 
persons  authorized  by  them  to  make  purchases,  and  of  the  persons  making 
the  proposals;  and  are  to  be  accounted  for  at  the  Treasury,  and  reported  to 
Congress  in  the  same  manner  as  the  purchases  before  authorized  to  be  made. 

VI.  An  act  making  appropriations  for  the  support  of  government  for  the 
year  1793. 

This  act  provides  that  the  President  of  the  United  States  shall  cause  so 
much  of  the  loan  made  of  the  Bank  of  the  United  States,  pursuant  to  the 
11th  section  of  the  act  of  incorporation,  to  be  paid  off  In  sums  not  less  than 
50,000  dollars,  as,  in  his  opinion,  the  state  of  the  Treasury  may  from  time  to 
time  admit,  out  of  any  moneys  which  may  be  in  the  Treasury,  having  due 
regard  to  the  exigencies  of  the  government,  and  the  appropriations  made 
and  to  be  made  by  law. 

VII.  An  act  making  provision  for  the  payment  of  the  first  instalment  due 
On  a  loan  made  of  the  Bank  of  the  United  States,  passed  March  2d,  1793. 

This  act  authorizes  the  payment  of  the  first  instalment  of  a  loan  of  two 
millions  of  dollars  had  of  the  Bank  of  the  United  States,  pursuant  to  the  1 1th 


1795.]  SECRETARY  OF  THE  TREASURY.  J67 

section  of  the  act  by  which  it  is  incorporated,  out  of  the  moneys  borrowed 
upon  the  authority  of  the  act  making  provision  for  the  reduction  of  the  pub- 
lic debt. 

VIII.  An  act  providing  for  the  payment  of  the  second  instalment  due  on 
a  loan  made  of  the  Bank  of  the  United  States,  passed  June  4th,  1794. 

This  act  authorizes  the  payment  of  that  second  instalment,  out  of  the  pro- 
ceeds of  any  foreign  loans  before  that  time  transferred  to  the  United  States. 
It  makes  other  provisions,  which  have  been  noticed  under  a  preceding  head. 

These  acts  comprise  all  the  provisions,  which  have  been  made  for  reim- 
bursing and  redeeming  the  debt  of  the  United  States.  The  result  to  the 
last  of  December,  1794,  is  presented  in  the  statement  E. 

There  are  two  other  acts,  which,  though  not  falling  properly  under  either 
of  the  foregoing  heads,  require,  from  their  relation  to  the  subject,  to  be 
brought  into  view. 

1st.  An  act  relative  to  claims  against  the  United  States,  not  barred  by 
any  act  of  limitation,  and  which  have  not  been  already  adjusted,  passed 
February  12th,  1793. 

This  act  directs  that  all  claims  of  the  description  given  jn  the  title  shall 
be  presented  at  the  Treasury  for  adjustment,  by  the  1st  of  May,  1794,  or 
shall  be  for  ever  after  barred ;  except  those  for  Loan  Office  Certificates, 
Final  Settlements,  Indents  of  Interest,  Registers'  Certificates,  Balances 
on  the  books  of  the  Treasury,  Loans  of  money  in  foreign  countries,  Cer- 
tificates issued  under  the  act  entitled  uJln  act  making  provision  for  the 
debt  of  the  United  States." 

Such  of  the  claims  presented  as  cannot  be  admitted  in  the  course  of  the 
Treasury,  are  to  be  reported  to  Congress  by  the  accounting  officers. 

Among  the  claims  inadmissible  in  the  ordinary  course  of  the  Treasury,  is 
a  sum  of  90,574  dollars,  of  the  bills  of  credit  commonly  called  new  emission 
money. 

2d.  An  act  making  further  provision  for  the  expenses  attending  the  in- 
tercourse of  the  United  States  with  foreign  nations,  &c.  passed  March  20th, 
1794. 

This  act  appropriates,  in  addition  to  former  provisions,  one  million  of  dol- 
lars for  the  purposes  mentioned  in  the  title,  to  be  paid  out  of  any  moneys 
which  may  be  in  the  Treasury  not  otherwise  appropriated,  and  to  be  applied 
under  the  direction  of  the  President  of  the  United  States,  who  is  also  au- 
thorized, if  necessary,  to  borrow  the  whole,  or  any  part  of  the  sum;  but 
there  is  no  special  appropriation  either  for  paying  the  interest  or  reim- 
bursing the  principal  of  the  loan. 

The  act  already  quoted,  of  the  9th  of  June,  1794,  entitled  "An  act  mak- 
ing appropriations  for  certain  purposes  therein  expressed,"  with  a  view  u> 
remedy  this  defect,  appropriates  out  of  the  proceeds  of  the  taxes  laid  dur- 
ing the  last  session,  such  sum  as  shall  be  sufficient  to  pay  the  interest  ore 
whatever  moneys  may  be  borrowed  pursuant  to  the  act  of  March  20th,  1794. 

The  foregoing  review  of#the  laws  which  constitute  the  fiscal  system  of 
the  United  States,  displays  these  prominent  points  as  the  leading  features  of 
that  system. 

1st.  That  all  the  current  revenues  of  the  United  States  are  derived  from 
these  sources,  to  wit:  Imported  articles;  the  tonnage  of  ships  and 
vessels;  spirits  distilled  within  the  United  States,  and  stills;  the  postage 
of  letters;  fees  on  patents;  dividends  of  bank  stock;  snuff  manufactured 
within  the  United  States;  sugar  refined  within  the  United  States;  sales  at 


16§  REPORTS  OF  THE  [1795, 

auction;  licenses  to  retail  wines  and  distilled  spirits;  carriages  for  the 
conveyance  of  persons. 

2d.  That  of  these  revenues,  the  principal  part  of  the  duties  on  imported 
articles,  those  on  the  tonnage  of  ships  or  vessels,  those  on  distilled  spirits 
and  stills,  those  on  the  postage  of  letters,  patent  fees,  the  dividends  on  bank 
stock,  are  permanent,  (the  three  first  being  commensurate  with  the  exist- 
ence of  the  debt,  for  the  payment  of  the  interest  of  which  they  are  pledged., 
the  fourth  and  fifth  having  no  limit  assigned  in  the  laws,  and  the  last  being 
commensurate  with  the  duration  of  the  property  in  the  stock,)  all  the  others 
temporary;  being  limited  to  continue  no  longer  than  till  the  end  of  the  ses- 
sion of  Congress  next  after  the  expiration  of  two  years  from  the  respective 
times  of  passing  the  laws  which  established  them,  except  the  temporary  du- 
ties on  imports-and  tonnage,  which  are  to  continue  till  the  1st  of  January, 
1797. 

3d.  That  the  permanent  duties  on  imported  articles,  the  tonnage  duties, 
the  duties  on  spirits  distilled  within  the  United  States,  and  on  stills,  are  sub- 
ject to  these  permanent  dispositions: 

1.  To  an  annual  reservation  of  600,000  dollars,  for  the  support  of 
the  government  of  the  United  States  and  their  common  defence. 

2d.  To  an  appropriation  of  so  much  as  may  be  necessary  to  pay 
the  interest  on  the  foreign  loans  provided  for  by  the  funding  act. 

3d.  To  an  appropriation  of  so  much  as  may  be  necessary  to  pay 
the  interest  on  the  stock  created  by  the  loan  in  domestic  debt,  or 
more  properly  in  the  original  debt  of  the  United  States. 

4th.  To  an  appropriation  of  so  much  as  may  be  necessary  to  dis- 
charge the  interest  on  the  stock  created  by  the  loan  in  the  debts  of 
the  respective  States. 

5th.   To  an  appropriation  of  so  much  as  may  be  necessary  to  pay 
the  interest  on  the  balances  due  to  creditor  States,  which  disposi- 
tions establish  priorities,  according  to  the  order  in  which  they  are 
here  enumerated. 
4th.   That  the  surplus,  if  any,  of  the  duties  on  spirits  distilled  within  the 
United  States,  and  on  stills,  has  an  ultimate  appropriation,  that  is,  to  the  re- 
duction of  the  public  debt;  but  that  the  surplusses  of  the  other  duties  have 
no  such  ultimate  appropriation. 

5th.  That  the  duties  on  the  postage  of  letters,  and  the  nett  dividend  on 
bank  stock,  have  no  permanent  or  particular  appropriation. 

6th.  That  the  temporary  duties  are  charged  with  a  specific  sum  of 
1,292,137  dollars  and  38  cents;  and  with  the  payment  of  interest  on  a  sum 
of  1,000,000  of  dollars  authorized  to  be  borrowed  for  the  expenses  of 
foreign  intercourse. 

7th.  That  the  whole  of  the  foreign  debt,  and  all  that  part  of  the  domestic 
debt,  being  now  nearly  the  whole,  which  consists  of  the  stock  created  by 
the  loans  in  the  original  debt  of  the  United  States,  and  in  the  particular 
debts  of  the  several  States,  and  by  the  balances  due  to  creditor  States,  are 
bottomed  on  certain  specified  revenues.,  pledged  or  hypothecated  for  the 
payment  of  the  interest  upon  them;  and  thus  constitute  the  funded  debt 
of  the  United  States. 

8th.  That  the  funded  domestic  debt  of  the  United  States  consists  of  three 
species  of  stock,  one  bearing  a  present  interest,  of  six  per  cent  per  annum; 
another  bearing  a  like  interest  after  the  year  1S00;  a  third  bearing  a  present 
interest  of  three  per  centum  per  annum:  the  interest  in  each  case  payable 
quarter  yearly. 


1795.]  SECRETARY  OF  THE  TREASURY.  \Q§ 

9th.  That  the  six  per  cent,  stock,  present  and  deferred,  can  he  redeemed 
in  no  greater  proportion  than  at  the  rate  of  eight  per  centum  per  annum  of 
the  original  sum,  on  account  both  of  principal  and  interest;  but  the  three 
per  cent,  stock  is  redeemable  at  pleasure. 

10th.  That  the  provision  for  subscribing  to  the  loan  in  domestic  debt,  ex- 
pired on  the  last  of  December,  1794,  and  that  no  further  provision  has 
been  made  for  the  unsubscribed  residue. 

11th.  That  the  funding  act  expressly  confirms  the  contracts  and  rights 
of  the  creditors  of  the  United  States,  who  shall  not  think  fit  to  subscribe 
to  the  loan,  and  gives  an  expectation  to  them  of  further  and  other  ar- 
rangements, upon  the  event  of  the  propositions  made  to  them. 

12th.  That  the  proceeds  of  all  the  lands  of  the  United  States  in  the 
Western  Territory,  are  appropriated  to  the  redemption  of  all  that  part  of  the 
public  debt,  for  which,  prior  to  the  funding  act,  or  by  virtue  thereof,  the 
United  States  were  or  are  liable. 

13th.  That  in  addition  to  this,  a  regular  sinking  fund  has  been  succes- 
sively constituted,  to  be  applied  under  the  direction  of  five  principal  officers 
of  the  United  States,  with  the  approbation  of  the  President,  hitherto  com- 
posed of  three  parts:  1st.  The  surplus  of  the  duties  on  imports  and  ton- 
nage to  the  end  of  1790.  2dly.  The  proceeds  of  loans  not  exceeding 
2,000,000  of  dollars,  authorized  to  be  borrowed  for  the  purpose;  (these  two 
funds  to  be  invested  in  purchases;)  and  3dly,  (in  which  the  two  former  re- 
solve themselves,)  the  interest  on  the  public  debt, purchased,  redeemed,  or 
paid  into  the  Treasury,  together  with  the  surplusses,  if  any,  of  moneys 
appropriated  for  interest,  to  be  applied  first  to  purchases  of  the  debt,  till 
the  fund  is  equal  to  two  per  centum  of  the  outstanding  stock,  bearing  a 
present  interest  of  six  per  cent. ;  second,  to  the  redeynption  of  that  stock; 
and  lastly,  to  purchases  of  any  unredeemed  residue  of  the  public  debt.  But 
there  is  reserved,  out  of  this  fund,  a  sum  not  exceeding  eight  per  centum 
per  annum,  towards  the  payment  of  interest,  and  reimbursing  of  the  prin- 
cipal of  the  loans  made  for  purchases  of  the  debt. 

To  this  recapitulation  of  the  leading  features  of  our  fiscal  system,  it  may 
be  useful  to  add  a  summary  exhibition  of  certain  results,  which  appear  more 
in  detail,  or  are  deducible  from  the  tables  or  statements  annexed  to  this  report. 

The  particulars  and  amount  of  the  debt  of  the  United  States,  are  as  follow: 

Foreign  debt,  as  per  statements  B  and  C,    $14,599,129  35 

Deduct  instalment  of  foreign  debt  in  the 
year  1795,  to  be  paid  out  of  proceeds  of 
foreign  loans  -  -  -  853,750  00 


Funded  domestic  debt,  viz. 

1.  Arising  from  original  domestic  debt, 
subscribed  to  loan  proposed  by  funding  act: 
Stock  bearing  a  present  interest  of  six  per 

cent.  -  -  -  -      $17,912,138  01 

Stock  bearing  a  future  interest  of  ditto  8,5S8,228  97 

Stock  bearing  an  interest  of  3  per  cent.  12,275,347  55 

2.  Arising  from  State  debts  assumed: 

Stock  bearing  a  present  interest  of  6  per  cent.    7,908,374  19 
Stock  bearing  a  future  interest  of  ditto  3,940,608  96 

Stock  bearing  an  interest  of  3  per  cent.  5,994,115  79 


13,745,379  Sfr 


170  REPORTS  OF  THE  [1795. 


$2, 345,056  00 

1,172,528  00 

703,516  80 

„   fS  fin  7°,n  nil 

IS 

1,072,583  40 
'     452,826  74 

27,935  00 
7,830  00 

14 

$76,096,468 

67 

3.  Arising  from  balances  to  creditor  States: 
Stock  bearing  a  present  interest  of  6  per 

cent.  - 

Stock  bearing  a  future  interest  of  do.  - 
Stock  bearing  an  interest  of  3  per  cent. 

Unsubscribed  debt,  viz. 

Principal,  exclusive  of  Loan  Office  certifi- 
cates, bearing  interest  on  nominal  value 

Interest  thereupon,  including  indents 

Principal  of  Loan  Office  certificates,  bear- 
ing interest  on  nominal  sum 

Interest  thereupon      - 


Total  unredeemed  debt 

This  is  exclusive  of  a  sum  of  $1,400,000  due  to  the  Bank  of  the  United 
States,  on  account  of  the  loan  of  $2,000,000  had  of  that  institution,  pursuant 
to  the  eleventh  section  of  the  act  by  which  it  is  incorporated,  and  which  is 
not  included  in  the  mass  of  the  debt,  because  it  is  more  than  counterbalanced 
by  a  greater  value  in  stock.  It  is  also  exclusive  of  those  loans  which  are 
temporary  anticipations  of  the  revenue. 

The  particulars  and  amount  of  the  annual  current  revenues  of  the  United 
States,  are  as  follow: 

APPROPRIATED. 

Duties  on  imports  and  tonnage,  domestic 

Duties  on  distilled  spirits  and  stills 

Fees  on  patents  -  -  - 

UNAPPROPRIATED. 

Postage  of  letters  -  -  - 

Surplus  dividends  on  bank  stock 


Temporary  duties'on  imports 

INTERNAL. 

Duties  on  snuff,  refined  sugar,  sales  at  auction, 
licenses  to  retail  spirits  and  wines,  car- 
riages for  conveyance  of  persons 


Total  annual  current  revenue 

The  particulars  and  amount  of  the  annual  stated  expenditure  of  the  United 
States,  computing  the  Army  and  Navy  establishments,  on  the  scale  of  an 
Indian  and  Algerine  war,  are  as  follow: 

Interest  on  the  foreign  debt     -  -  -  $    638,480  58 

Interest  on  domestic  funded  debt  ^  2,339,241   50 

Interest  on  unfunded  debt  -  66,031   10 

Interest  on  temporary  loans     -  100,000  00 


PERMANENT. 

$4,199,791   67 

400,000  00 

660  00 

29,722 
62,500 

16 
00 

$  4  6Q2  67S   ^3 

TEMPORARY. 

1,479,626 

91 

380,000 

00 

$>  1  fi^Q  626 

91 

;nue 

$6,552,300 

74 

1795.]  SECRETARY  OF  THE  TREASURY.  171 

Expenses  of  the  civil  government,  including  foreign  inter- 
course              _             .             .             _             _             _  $  475,249  53 
Expenses  of  military  land  service            -  1,511,975  29 
Expenses  of  military  naval  service          -             -             -  441,508  80. 
Miscellany          -_.-_.  109,357  04 

Total  annual  expenditure  $5,681,843  84 

This  sum  is  liable  to  be  increased  by  the  interest  which  will  begin  to  ac- 
crue on  the  deferred  stock  the  first  of  January,  1801,  being,  on  the  present 
amount  of  that  stock,  871,401  dollars,  and  92  cents. 

The  annual  force  of  the  sinking  fund,  as  depending  on  ascertained  funds, 
may  be  stated  as  follows: 

Interest  for  a  year  on  sums  already  carried  to  its  credit  $  68,225  55 

Interest  for  a  year  on  debts  of  foreign  officers,  in  a  course 
of  payment,  including  arrears  of  interest  to  be  carried  to 
the  credit  of  this  fund  -  13,439  49 

Interest  for  a  year,  on  the  unexpended  surplus  of  the  reve- 
nues at  the  end  of  the  year  1.790,  being  411,659'  dol- 
lars 49  cents,  supposing  this  to  be  invested  by  purchase 
in  an  equal  sum  of  present  six  percent,  stock  -  24,699  56 

$106,364  60 


It  is  further  liable  to  be  increased  by  an  investment  In  purchases  of 
865,098  dollars  11  cents,  which,  together  with  the  sums  from  that  source 
already  invested  in  purchases  and  payments,  will  amount  to  2,000,000  of 
dollars,  the  sum  authorized  to  be  borrowed  for  purchases  of  the  debt. 

But,  as  this  auxiliary  depends  on  an  operation,  not  only  future,  but  in 
some  degree  casual,  it  cannot  be  taken  into  an  estimate  of  the  actual  strength 
of  the  fund. 

The  proceeds  of  the  sales  of  western  lands  must  also  be  considered  as  an 
eventual  resource. 

There  are  other  contingent  sources  of  augmentation,  not  computed,  because 
they  are  contingent.  But,  on  the  other  hand,  the  fund  is  liable  to  be  reduced 
by  a  sum  reserved  out  of  it  for  the  payment  of  principal  and  interest  of  the 
two  millions  authorized  to  be  borrowed  for  purchases  not  exceeding  eight 
per  centum  per  annum. 

The  sum  applicable,  in  the  first  instance,  to  the  redemption  of  that  portion 
of  the  funded  debt  which  bears  a  present  interest  of  6  per  centum,  excluding 
that  standing  to  the  credit  of  the  Commissioners  of  the  Sinking  Fund,  is  as 
follows: 

Of  transferable  stock,  -  -      .       -  .         g  516,410  24 

Of  untransferable  stock,  arising  from  balances  to 

creditor  States,         -  46,901   12 


$563,311   36 


The  sum  applicable  in  the  first  instance,  that  is,  on  the  1st  day  of  January, 
1802,  to  the  redemption  of  that  portion  of  the  funded  debt,  now  called  de- 
ferred stock,  excluding  that  standing  to  the  credit  of  the  Commissioners  of 
the  Sinking  Fund,  will  be  as  follows: 
23 


172  REPORTS  OF  THE  [1795. 

Of  transferable  stock,        -s  -  -  -.       $249,576  75 

Of  untransferable  stock,  arising  from  balances  to 

creditor  States,  -  -  -  ...        23,450  56 


$273,027  31 


These  sums  would  complete  the  redemption  of  the  whole  amount  of  the- 
stock  to  which  they  are  applicable,  within  twenty-three  years  after  the  re- 
demption in  each  case  was  begun;  within  which  terms  they  would  discharge 
the  whole  of  the  public  debt,  except  the  foreign  debt,  the  unsubscribed  debt, 
and  the  three  per  cent,  stock. 

If  the  redemption  of  the  present  6  per  cent,  stock,  commence  the  first  of 
January,  1796pmd  the  redeeming  fund  be  commensurate  with  the  whole  of 
the  unredeemed  stock  bearing  a  present  interest  of  six  per  cent.,  and  trans- 
ferable, the  revenue  set  free  in  the  year  1818,  for  operations  upon  the  residue 
of  the  debt,  will  be  2,039,394  dollars  36  cents. 

If  the  redemption  of  the  deferred  debt  commence  the  first  of  January, 
1S02,  when  it  may  rightfully  commence,  and  the  redeeming  fund  be  com- 
mensurate with  the  whole  of  that  stock,  unredeemed  and  transferable,  the 
revenue  set  free  in  the  year  1824,  for  operations  upon  the  residue  of  the  pub- 
lic debt,  if  any  remain,  will  be  $998,307  02. 

The  revenue  set  free  by  these  successive  redemptions,  would  be  sufficient 
to  redeem  the  whole  of  the  present  foreign  debt  in  six  years;  that  is,  within 
a  term  of  twenty-eight  years  from  the  proposed  time  for  commencing  the 
redemption,  or  the  1st  January,  1796;  and,  after  extinguishing  the  foreign 
debt,  would  more  than  discharge  the  whole  of  the  balances  to  creditor 
States,  and  the  whole  of  the  unfunded  debt  in  two  years  more. 

If  the  proceeds  of  the  lands  in  the  Western  Territory,  should  be  equal  to 
three  millions  of  dollars,  and  the  three  per  cent,  stock  can  be  purchased  at  an 
average  of  twelve  shillings  in  the  pound,  that  fund  would  suffice  to  pay  off 
the  principal  of  the  three  per  cent,  stock,  in  something  more  than  25  years. 

It  follows,  that  if  the  force  of  the  sinking  fund  be  rendered  equal,  ex- 
clusive of  the  proceeds  of  the  sales  of  western  lands,  to  the  redemption  of 
the  present  unredeemed  transferable  stock,  commencing  the  1  st  of  January, 
1796,  as  to  that  bearing  a  present  interest  of  6  per  centum,  and  the  1st  of 
January  1802,  as  to  that  bearing  a  future  interest  of  6  per  centum;  and  if 
the  proceeds  of  the  sales  of  western  lands,  should  prove  equal  to  3,000,000 
of  dollars,  and  can  be  brought  into  action  for  purchases  of  3  per  cent,  stock, 
at  the  rate  above-mentioned,  at  any  time  before  the  year  1801,  the  whole  of 
the  present  debt  of  the  United  States,  foreign  and  domestic,  (the  funds  ap- 
propriated, being,  during  the  whole  period,  adequate  in  productiveness,  and 
inviolably  applied,)  would  be  extinguished  in  thirty  years.  And  there 
would  then  revert  to  the  United  States,  an  annual  income  of  4,435,320  dol- 
lars and  89  cents.  Some  auxiliary  provisions,  which  will  be  proposed,  may 
oreatly  accelerate  that  result.  * 

On  the  basis  of  the  foregoing  data,  the  Secretary  of  the  Treasury  proceeds 
to  submit  to  the  consideration  of  Congress  certain  propositions,  which  appear 
to  him  necessary  to  be  adopted  to  complete  our  system  of  public  credit. 
These  will  be  followed  by  some  explanatory  remarks. 

*  j\j0fc. These  results  are  not  stated  with  fractional  correctness,  because  it  is  not  neces- 
sary to  a  satisfactory  conclusion,  and  the  minuteness  of  the  calculation  would  have  demanded 
more  time  than  can  conveniently  be  spared. 


1795.1  SECRETARY  OF  THE  TREASURY.  173 

I.  PROPOSITION, 

That  further  provision  be  made,  with  regard  to  the  yet  unsubscribed  debt 
of  the  United  States,  as  follows: 

1st.  Further  time  to  be  given,  until  the  end  of  the  year  1795,  to  subscribe 
the  same  to  the  loan  proposed  by  the  funding  act — with  liberty  to  the  hold- 
ers to  subscribe  the  arrears  of  interest  up  to  that  period,  separately  from  the 
principal,  reserving  that  principal  on  its  original  footing. 

2d.  An  appropriation  to  be  made  for  payment  of  interest  on  so  much  of 
the  principal  (excepting  Loan  Office  certificates  bearing  interest  on  the.  nomi- 
nal value,)  as  at  the  end  of  the  year  1795  shall  remain  unsubscribed,  for  the 
term  of  one  year,  according  to  the  rate  or  rates  stipulated  by  the  original 
contracts,  and  for  the  payment  of  ten  per  centum  of  the  arrears  of  interest 
thereupon  to  the  same  end  of  the  year  1795.  This  payment  to  be  made  on 
the  1st  of  January,  1796,  at  the  Treasury,  where  no  particular  place  of 
payment  is  stipulated,  and  at  such  place,  where  there  is  one. 

3d.  The  specie  principal  of  the  Loan  Office  certificates  which  bear  interest 
on  the  nominal  value,  together  with  the  arrears  of  interest,  to  be  immediately 
paid  off. 

II.  PROPOSITION. 

That  provision  be  made  for  taking  upon  loan  to  the  United  States,  by  sub- 
scription at  the  Treasury,  the  outstanding  and  unbarred  new  emission 
bills  of  credit,  the  sums  subscribed  to  be  paid  in  the  principal  only  of  those 
bills,  and  the  stock  of  the  new  loan  to  bear  an  interest  of  5  per  "cent,  per  an- 
num, pa)rable  quarter  yearly  at  the  Treasury,  and  redeemable  at  the  pleasure 
of  the  United  States,  by  payment  of  the  principal;  with  a  stipulation  to  pay 
the  same  at  the  expiration  of  thirty  years.  The  loan  to  be  deemed  to  com- 
mence on  the  first  of  January,  1796,  and  to  rest  on  funds  permanently 
pledged,  namely,  the  permanent  revenues. 

III.  PROPOSITION, 

That  provision  be  made  for  converting,  by  a  new  loan,  the  whole  of  our 
present  foreign  into  domestic  debt,  upon  these  terms,  to  wit:  that  for  any 
sum  subscribed  to  the  new  loan,  and  paid  in  the  principal  of  the  present  fo- 
reign debt  of  the  United  States,  there  be  allowed,  in  addition  to  the  interest 
now  payable  upon  such  principal,  the  further  yearly  interest  of  h  per  centum, 
or  in  lieu  thereof,  at  the  option  of  each  subscriber,  an  equivalent,  sum  in  ca- 
pital stock,  bearing  an  interest  of  5  per  centum  per  annum.  That  the  whole 
interest  upon  the  new  loan,  including  that  upon  the  capital  stock,  to  be  given, 
as  an  equivalent  for  the  additional  \  per  cent.,  shall  remain  fixed  until  the 
first  day  of  January,  1818,  at  which  time,  and  not  sooner,  the  principal  of 
the  said  new  loan,  including  the  said  capital  stock  given  as  an  equivalent, 
may  and  shall  be  reimbursed,  except  as  to  such  subscribers  as  may  prefer  a 
shorter  term  of  reimbursement,  who  may  elect  any  term  not  less  than  fifteen 
years.  That  the  permanent  revenues  shall  be  and  remain  firmly  pledged  for 
the  payment  of  the  said  interest,  until  the  reimbursement  of  the  said  princi- 
pal, to  be  paid  quarter  yearly,  as  that  of  the  present  funded  domestic  debt. 
And  lastly,  that  the  Commissioners  of  the  Sinking  Fund  he  empowered, 
with  the  approbation  of  the  President,  to  provide,  by  new  loans,  for  the  re- 
imbursement of  any  instalment  or  part  of  principal  of  the  present  foreign 


274  REPORTS  OF  THE  [1795. 

debt,  or  of  the  loan  to  be  made  thereupon  as  aforesaid,  either  by  direct  bor- 
rowing, or  by  sale  in  the  market,  of  certificates  of  stock,  so  as  the  said  loan 
or  the  said  certificates  of  stock  shall  bear  an  interest  not  exceeding  6  per 
centum  per  annum,  and  shall  be  liable  to  reimbursement  within  &  term  not 
exceeding  twenty -four  years.  The  interest  upon  the  capital  reimbursed, 
and  in  aid  thereof  the  permanent  revenues,  to  be  pledged  for  the  interest 
upon  the  loans  or  stock  to  be  made  or  created  by  virtue  of  the  said  power. 

IV.  PROPOSITION. 

That  the  temporary  duties  on  imports  be  made  co-extensive  in  duration  with 
those  now  permanent,  and  be  appropriated  in  like  manner;  and  that  the  re- 
servation of  600,000  dollars,  annually,  out  of  the  duties  on  imports  and  ton- 
nage, for  the  support  of  the  government  of  the  United  States  and  their  com- 
mon defence,  be  postponed  till  after  the  appropriations  for  the  interest  of 
the  funded  debt,  foreign  and  domestic,  and  for  the  sinking  fund. 

V.  PROPOSITION. 

That  the  following  provisions  be  added  to  those  heretofore  made  for  re- 
imbursing and  redeeming  the  debt  of  the  United  States: 

1st.  To  direct,  by  law,  that  so  much  of  the  surplus  of  the  duties  on  imports 
and  tonnage,  to  the  end  of  the  year  1790,  as  shall  remain  uninvested  in  pur- 
chases on  the  1st  day  of  January,  1796,  shall  be  so  invested,  one-fourth  part 
within  the  month  of  April,  another  fourth  part  within  the  month  of  July,  an- 
other fourth  part  within  the  month  or  October,  in  that  year,  and  the  remain- 
der within  the  month  of  January,  1797. 

2d.  To  exonerate  the  fund  established  by  the  act,  entitled  "  An  act  sup- 
plementary to  the  act  making  provision  for  the  debt  of  the  United  States," 
passed  the  8th  of  May,  1792,  from  the  payment  of  the  rate  per  annum, 
which,  by  the  4th  section  of  the  act  of  the  12th  of  August,  1790,  entitled 
"An  act  making  provision  for  the  reduction  of  the  public  debt,"  is  reser- 
ved, on  account  of  the  principal  and  interest  of  the  moneys  authorized  by 
that  act  to  be  borrowed  for  purchases  of  the  debt;  charging  the  interest  of 
the  moneys  so  borrowed  upon  the  revenue  from  imports  and  tonnage. 

3d.  To  appropriate  to  the  same  fund,  so  much  of  the  revenue  from  im- 
ports and  tonnage,  as,  together  with  the  other  moneys  now  constituting  the 
fund,  and  which  shall  accrue  to  it  by  virtue  of  the  foregoing  provisions, 
shall  be  sufficient,  from  year  to  year,  with  the  interest  redeemed,  to  pay  the 
sums  which  may  of  right  be  annually  paid  on  account  of  the  principal  of 
such  funded  stock,  as  on  the  1st  day  of  January,  1796,  shall  bear  a  present 
interest  of  6  per  centum  per  annum,  excluding  that  which  shall  stand  to  the 
credit  of  the  Commissioners  of  the  Sinking  Fund,  and  that  which  shall  stand 
to  the  credit  of  particular  States,  on  account  of  the  balances  reported  in  their 
favor  by  the  Commissioners  for  settling  accounts  between  the  United  States 
and  individual  States;  to  continue  so  appropriated  until  the  whole  of  the  said 
funded  stock  shall  be  redeemed,  and  thenceforth  until  the  whole  residue  of 
the  present  debt  of  the  United  States,  foreign  and  domestic,  funded  and  un- 
funded, shall  be  redeemed  or  discharged. 

4th.  To  appropriate  to  the  same  fund,  the  dividends  on  the  stock  of  the 
Bank  of  the  United  States,  belonging  to  the  United  States,  reserving,  from 
time  to  time,  so  much  thereof  as  may  be  necessary  to  pay  interest  on  what 


1795.]  SECRETARY  OF  THE  TREASURY.  175 

shall  remain  unpaid  of  the  loan  had  of  the  said  Bank,  pursuant  to  the  2d, 
section  of  the  act  of  incorporation,  and  also  so  much  of  the  duties  on  imports 
and  tonnage,  as,  together  with  those  dividends,  (deducting  what  may  be 
necessary  to  pay  interest,)  shall  be  sufficient,  from  year  to  year,  to  pay  off 
the  instalments  of  the  said  loan  hereafter  to  grow  due,  and  as,  (the  said  in- 
stalments being  paid,)  together  with  any  other  moneys  which,  on  the  1st 
day  of  January,  1802,  may  belong  to  the  said  fund,  not  otherwise  ap- 
propriated, shall  be  sufficient,  from  year  to  year,  with  the  interest  redeem- 
ed, to  pay  the  sums  which  may  of  right  be  annually  paid  on  account  of  the 
principal  of  such  funded  stock,  as  at  the  expiration  of  the  year  1800,  shall 
begin  to  bear  an  interest  of  six  per  cent,  per  annum — excluding  that  which 
shall  stand  to  the'  credit  of  the  Commissioners  of  the  Sinking  Fund,  and 
that  which  shall  stand  to  the  credit  of  particular  States  on  account  of  the 
balances  reported  in  their  favor  by  the  Commissioners  for  settling  accounts 
between  the  United  States  and  individual  States;  to  continue  so  appropriat- 
ed, until  as  well  the  last  mentioned  stock  as  the  instalments  of  the  loan  afore- 
said, shall  be  fully  redeemed  and  discharged;  and  thenceforth  until  the  whole 
residue  of  the  present  debt  of  the  United  States,  foreign  and  domestic,  fund- 
ed and  unfunded,  shall  be  redeemed  and  discharged. 

5th.  To  continue  the  appropriation  to  the  same  fund,  of  the  interest  of 
the  stock  which  shall  be  redeemed  by  virtue  of  the  foregoing  provisions, 
(when  the  full  redemption  in  each  case  is  completed,)  until  the  whole  of  the 
present  debt  of  the  United  States,  foreign  and  domestic,  funded  and  un- 
funded, shall  be  redeemed,  by  reimbursement,  purchase,  or  otherwise. 

6th.  To  provide  for  carrying  to  the  same  fund,  agreeably  to  the  appro- 
priation in  the  funding  act,  the  proceeds  of  the  sales  of  the  lands  of  the  Uni- 
ted States  in  the  Western  Territory,  to  be  applied  according  to  the  said  ap 
propriation. 

7th.  To  appropriate  to  the  same  fund,  to  be  employed  for  the  purposes 
thereof,  all  moneys  which  shall  be  received  for  debts  due  to  the  United 
States  antecedent  to  the  present  Constitution. 

8th.  To  provide  that  the  surplusses  of  all  the  current  revenues  of  the 
United  States,  which  shall  remain  at  the  end  of  any  calendar  year,  beyond 
the  amount  of  the  appropriations  charged  upon  them,  and  which,  during  the 
session  of  Congress  commencing  next  thereafter,  shall  not  be  otherwise  spe 
cially  appropriated  or  reserved,  shall  be  carried  to  the  fund  aforesaid,  to 
be  applied  to  the  purposes  thereof. 

9th.  To  provide  for  paying  annually,  out  of  the  said  fund,  the  sum 
which  may  be  rightfully  paid  in  each  year,  towards  the  redemption  of  the 
funded  stock,  which  does  or  shall  bear  an  interest  of  6  per  centum  per  an- 
num, excluding  that  which  shall  stand  to  the  credit  of  the  Commissioners  of 
the  Sinking  Fund,  and  that  which  shall  stand  to  the  credit  of  particular 
States,  on  account  of  the  balances  reported  in  their  favor  by  the  Commissioners 
for  settling  accounts  between  the  United  States  and  individual  States,  com- 
mencing the  redemption  of  that  bearing  a  present  interest,  on  the  first  of 
January,  1796,  and  of  that  to  bear  interest  after  the  year  1800,  on  the  first 
of  January,  1802,  and  pledging  in  the  firmest  manner  the  faith  of  the  United 
States,  to  the  creditors  thereof,  that  the  said  fund  shall  be  inviolably  appli- 
ed to  the  purpose  of  redeeming  the  stock  aforesaid,  and  afterwards  to  the 
redemption  of  the  whole  of  the  present  debt  of  the  United  States,  foreign 
and  domestic,  funded  and  unfunded,  until  the  whole  shall  be  fully  redeemed 


j76  REPORTS  OF  THE  [1795. 

and  discharged,  and  to  be  vested  in  the  Commissioners  of  the  Sinking  Fund, 
as  property  in  trust  for  the  creditors,  until  the  redemption  of  the  whole  of  the 
present  debt  of  the  United  States  shall  be  completed. 

Provided,  always,  that  whenever  the  fund  shall  be  more  than  sufficient 
for  paying  off,  as  they  accrue,  the  remaining  instalments  of  the  said  loan  had 
of  the  bank  of  the  United  States,  and  for  the  complete  and  final  redemption 
of  the  whole  of  the  aforesaid  stock,  bearing  and  to  bear  an  interest  of  6  per 
cent,  according  to  the  right  reserved  for  that  purpose,  and  also  for  the  pay- 
ment of  the  instalments  of  the  present  foreign  debt,  or  of  such  new  loans  as 
may  be  made  thereupon,  pursuant  to  the  third  Proposition,  and  for  the  reim- 
bursement, purchase,  or  redemption  of  the  residue  of  the  present  debt  of  the 
United  States,  within  the  term  of  thirty  years,  it  shall  be  lawful  for  Con- 
gress, if  at  war  with  any  foreign  European  power,  to  apply  so  much  of  the 
excess  as  they  ^nay  think  fit,  the  said  excess  being  certified  by  the  Commis- 
sioners op  the  Sinking  Fund,  towards  the  expenses  of  such  war;  except- 
ing always  so  much  of  the  said  excess  as  may  be  requisite  to  fulfil  any  con- 
tracts which  shall  have  been  entered  into  by  the  Commissioners  of  the  Sink- 
ing Fund,  pursuant  to  the  powers  vested  in  them;  and  provided  that  no 
second  appropriation  of  any  such  excess  shall  derogate  from  the  fund  once 
reserved  for  the  redemption  or  purchase  of  the  said  residue  of  the  debt,  with- 
in the  said  term  of  thirty  years. 

10th.  To  provide  that  all  reimbursements  of  the  capital  of  the  public  debt, 
foreign  and  domestic,  and  of  the  remaining  instalments  of  the  aforesaid  loan 
of  the  bank  of  the  United  States,  be  made  under  the  superintendence  of  the 
Commissioners  of  the  Sinking  Fund,  empowering  them,  with  the  approba- 
tion of  the  President  of  the  United  States,  as  the  instalments  of  principal  be- 
come due,  to  borrow,  if  necessary,  the  sums  requisite  to  pay  those  instal- 
ments. Provided  that  the  ultimate  term  for  the  reimbursement  of  any  loan 
they  may  make,  shall  not  exceed  twenty -four  years;  the  interest  thereof  to 
be  charged — first,  upon  the  interest  of  the  instalments  which  shall  be  reim- 
bursed by  means  thereof,  except  the  instalments  of  funded  6  per  cent,  stock; 
secondly,  upon  the  revenue  from  imports  and  tonnage,  to  make  good  any  de- 
ficiency. 

VI.  PROPOSITION. 

That  power  be  given  to  the  Commissioners  of  the  Sinking  Fund,  with  the 
approbation  of  the  President,  to  borrow,  from  time  to  time,  such  sums  as  may 
be  necessary  in  anticipation  of  the  revenues  appropriated  for  the  purpose, 
not  exceeding  in  one  year  one  million  of  dollars,  to  be  reimbursed  within  a 
year  from  the  time  of  each  loan,  for  the  payment  of  the  interest  which  shall 
annually  accrue  on  the  public  debt. 

The  interest  upon  each  loan  to  be  defrayed  out  of  the  permanent  revenues. 

VII.  PROPOSITION. 

That  the  internal  revenues  from  snuff  and  refined  sugar,  sales  at  auction, 
licenses  to  sell  by  retail  foreign  distilled  spirits  and  wines,  carriages  for  the 
conveyance  of  persons,  be  continued  to  the  first  day  of  January,  1800,  and  that 
the  reimbursement  of  the  principal  of  the  loan  of  1,000,000  of  dollars  author- 
ized to  be  borrowed  for  defraying  the  expenses  of  foreign  intercourse,  be 
charged  upon  this  fund. 


1795.]  SECRETARY  OF  THE  TREASURY.  I77 

VIII.  PROPOSITION. 

That  in  regard  to  any  sum  which  shall  have  remained  unexpended  upon 
any  appropriations  other  than  for  the  payment  of  the  interest  of  the  funded 
debt  and  for  the  purposes  of  the  sinking  fund,  for  more  than  two  years  after 
the  end  of  the  calendar  year  in  which  the  act  of  appropriation  shall  have 
been  passed,  such  appropriation  shall  be  deemed  to  cease  and  determine — 
and  the  sum  unexpended  upon  it  shall  be  carried  to  an  account  to  be  denomi- 
nated "the  surplus  fund."  But  no  appropriation  shall  be  so  deemed  to 
have  ceased  or  determined,  till  after  the  year  1795,  unless  it  shall  appear  to 
the  Secretary  of  the  Treasury  that  the  object  of  such  appropriation  has  been 
fully  satisfied;  in  which  case  it  shall  be  lawful  for  him  to  cause  to  be  carried 
the  unexpended  residue  thereof  to  the  account  aforesaid. 

IX.  PROPOSITION. 

That  provision  be  made  that  all  priorities  heretofore  established  in  the  ap- 
propriations for  the  funded  debt,  as  between  the  different  parts  of  the  said 
debt,  shall,  after  the  year  1796,  cease,  with  respect  to  all  creditors  of  the 
United  States  who  do  not,  before  the  expiration  of  the  period,  signify  their 
dissent  therefrom;  and  that,  thenceforth,  with  the  exception  only  of  the 
debts  of  those  creditors  who  shall  so  signify  their  dissent,  the  revenues 
charged  with  these  appropriations  shall  constitute  a  common  or  consolidated 
fund,  chargeable  indiscriminately  and  without  priority. 

X.  PROPOSITION. 

That  provision  be  made  for  calling  in  all  outstanding  Loan  Office  certifi- 
cates, certificates  called  final  settlements,  and  indents  of  interest,  and  for  issu- 
ing, in  lieu  of  them,  other  certificates  of  equivalent  tenor — establishing  that 
all  which  shall  not  be  presented  for  exchange  within  the  term  of  two  years 
shall  be  barred. 

Remarks  upon  the  First  Proposition. 

The  experiment  has  now  been  fully  tried,  and  with  nearly  complete  suc- 
cess, of  the  disposition  of  the  public  creditors  to  accept  the  terms  offered  by 
the  funding  act.  Those  who  still  decline  have  probably  made  a  final  election 
to  abide  by  their  original  contracts. 

It  remains  to  fulfil  them.  This,  the  moral  obligation  of  the  contracts,  the 
new  and  peremptory  sanction  given  to  them  by  the  present  government,  and 
the  essential  maxims  of  public  credit,  unite  to  demand: — and,  while  these 
cogent  motives,  affecting  intimately  the  permanent  character  and  general  in- 
terest of  the  United  States,  recommend  the  measure,  there  is  now  no  longer 
any  momentary  inducement  from  situation  to  procrastinate. 

The  present  advanced  state  of  the  national  finances,  and  the  inconsiderable 
magnitude  of  the  still  unsubscribed  debt,  render  it  of  little  if  any  consequence 
to  obtain  upon  it  the  temporary  accommodation  of  deferring  the  payment 
of  a  part  of  the  interest  accruing  according  to  contract.  This  motive  apart, 
and  considering  the  approximation  of  the  period  when  the  payment  of  inter- 
est on  the  deferred  debt  is  to  commence,  the  chance  of  benefiting  by  a  fall  of 
the  market  rate  of  interest,  incident  to  a  provision  for  the  debt  on  the  terms  of 
the  contract,  which  make  it  redeemable  at  pleasure,  may  be  found  more  ad- 


j7g  REPORTS  OF  THE  [1795. 

vantageous  to  the  government,  than  the  partial  postponement  of  interest  en- 
cumbered with  an  abridgment  of  the  right  of  redemption. 

To  those  who  should  not  rightly  appreciate  this  circumstance,  it  might 
seem  an  objection,  that  the  provision  proposed  would  place  those  creditors 
who  had  not  consented  to  accommodate  the  government  upon  a  better  foot- 
ing than  those  who  had  so  consented. 

But  a  scruple  of  this  kind  is  overruled  by  several  considerations.  1st.  It 
is  not  improbable  that  a  considerable  proportion  of  those  who  may  not  have 
accepted  the  terms  offered  by  the  funding  act,  are  executors  and  other  trus- 
tees, who  may  have  doubted  their  power  to  accept. 

2d.  Giving  the  fullest  force  to  the  faet  which  is  the  ground  of  the  objec- 
tion, it  is  one  of  those  cases  in  which  the  general  principles  that  constitute 
the  permanent  happiness  of  society,  give  the  less  meritorious  advantages 
over  the  morelneritorious.  All  the  creditors  had  a  right  to  conform,  or  not. 
Those  who  have  not  done  it  have  only  used  their  right,  and  it  cannot  be 
matter  of  objection  or  prejudice  to  them.  To  delay  indefinitely  a  provision 
for  their  claims,  according  to  contract,  is  to   annihilate  the  contract. 

The  complying  creditors  cannot  with  propriety  complain.  They  were 
informed  unequivocally  that  the  proposal  of  a  new  loan  was  referred  to  their 
free  choice;  that  the  rights  of  those  who  did  not  assent  would  remain  unim- 
paired; and  compensations  were  offered  in  the  new  contracts  for  the  surren- 
der of  the  old.  A  plea  that  an  ultimate  provision  was  not  relied  upon  could 
not  be  admitted — because  it  would  be  to  convert  a  distrust  of  the  faith  of  the 
government  into  an  argument  against  its  being  observed  towards  those  who 
had  depended  upon  it. 

But  the  complying  creditors  actually  received  valuable  considerations  for 
the  modification  of  their  claims,  instead  of  annual  provision  for  their  inter- 
est, which  alone  their  contracts  as  they  stood  previous  to  the  funding  act  re- 
quired, they  have  had  it  secured  by  adequate  funds  permanently  mort- 
gaged for  its  payment. 

Instead  of  the  stipulated  annuity  being  redeemable  at  pleasure,  whenever 
a  fall  in  the  market  rate  of  interest  should  render  it  advantageous  to  pay  off 
the  principal — it  has  acquired  a  more  fixed  character  by  the  relinquishment 
of  the  right  of  the  government  to  redeem,  except  in  certain  proportions,  and 
a  capacity  to  increase  in  capital  value,  by  a  declension  of  the  market  rate  of 
interest. 

Instead  of  receiving  their  interest  in  one  payment  at  the  end  of  a  year,  they 
receive  it  in  quarter  yearly  portions,  which  makes  it,  in  fact,  6.15  percent, 
in  lieu  of  the  stipulated  rate  of  six  per  centum. 

On  the  first  point,  it  has  been  argued,  that  supposing  a  steady  preserva- 
tion of  its  faith  by  the  government,  it  is  indifferent  to  the  creditor  whether 
his  demand  stands  upon  the  basis  of  an  annual  provision  or  upon  that  of  mort- 
gaged funds. 

This  is  to  substitute  theory  to  fact.  As  well  with  regard  to  a  govern- 
ment as  to  an  individual,  there  is,  in  the  nature  of  things,  an  intrinsic  differ- 
ence between  the  value  of  a  debt  bottomed  on  mortgaged  funds,  and  that  of 
a  debt  resting  on  what  is  called,  in  the  one  case,  and  may  be  called  in  the 
olher,  personal  security.  The  degree  of  this  difference,  and  some  of  the 
circumstances  on  which  it  depends,  may  be  different  in  the  two  cases,  but 
the  reality  of  its  existence  can  be  denied  in  neither. 

Government,  being  administered  by  men,  is  naturally,  like  individuals, 
subject  to  particular  impulses,  passions,  prejudices,  vices;  of  course  to  incon- 
stancy of  views  and  mutability  of  conduct. 


1795.1  SECRETARY  OF  THE  TREASURY.  179 

A  kind  of  property,  of  which  the  essence  is  contract,  must  necessarily, 
therefore,  be  more  or  less  valuable,  because  more  or  less  secure,  in  propor- 
tion as  it  is  little  or  much  exposed  to  the  influence  of  that  inconstancy  or 
that  mutability. 

If  a  provision  is  to  be  made  by  a  new  resolution  every  year,  that  resolu- 
tion, being  always  liable  to  be  affected  by  momentary  circumstances,  h 
always  casual 

If  made  once  for  all,  it  continues,  of  course,  unless  revoked  by  some  posi- 
tive act,  and  has  for  that  reason  a  moral  certainty  of  stability. 

But  why,  it  might  be  asked,  if  a  disposition  unfaithful  to  the  public  en- 
gagements, or  unfriendly  to  public  credit,  should  exist,  would  it  not 
operate  to  produce  a  violation  of  a  provision  made,  as  well  as  1o  prevent  the 
making  of  one? 

The  two  things  are  widely  different.  To  undo,  which  is  to  act,  and  in 
such  a  case  to  act  with  violence,  requires  more  enterprise  and  vigor,  and 
presupposes  greater  energy,  or  a  stronger  impulse,  than  not  to  do,  or  to  for- 
bear to  act.  This  is  particularly  true  where  a  number  of  wills  is  to  concur. 
Many  men  who  will  not  rouse  to  the  effort,  or  encounter  the  responsibility 
of  doing  mischief  by  positive  acts,  will  readily  enough  slide  into  it  by  a 
negative  conduct,  that  is,  by  omitting  to  act.  Many  men,  merely  from 
easiness  of  temper  or  want  of  active  fortitude,  will  suffer  evil  to  take  place 
which  they  neither  desire  nor  would  themselves  commit.  In  collective 
bodies  voles  are  necessary  to  action:  absences  may  produce  inaction.  It 
often  happens,  that  a  majority  of  voices  could  not  be  had  to  a  resolution  to 
undo  or  reverse  a  thing  once  done,  which  there  would  not  be  a  majority  of 
voices  to  do. 

This  reasoning  acquires  tenfold  force  when  applied  to  a  complex  govern- 
ment like  ours;  that  is,  to  a  government  distributed  into  departments,  acting 
through  different  organs,  which  must  concur  to  give  it  motion;  as,  in  our 
constitution,  the  House  of  Representatives,  the  Senate,  and  the  Presi- 
dent. 

In  delicate  and  difficult  cases,  whether  to  issue  in  good  or  ill,  a  suspen- 
sion of  action  is  far  more  natural  to  such  a  government  than  action. 

It  can  hardly  happen,  that  all  the  branches  or  parts  of  it  can  be  infected 
at  one  time  with  a  common  passion,  or  disposition,  manifestly  inimical  to 
justice  and  the  public  good;  as  to  prostrate  the  public  credit,  by  revoking  a 
pledge  given  to  the  creditors.  It  is  far  more  probable  that  such  a  disposition 
should  at  one  time  possess  one  part,  at  another  time  another  part.  Pos- 
sessing either  part,  it  might  be  sufficient  to  obstruct  a  provision  which  was 
to  be  made.  Without  possessing  all  the  parts,  it  could  not  subvert  one  which 
had  been  made.  The  last  can  scarcely  be  supposed,  except  in  one  of  those 
extraordinary  crises  of  nations  which  confound  all  ordinary  calculations. 

Hence  the  value  of  property  in  public  debt,  which  rests  on  specified  and 
competent  funds,  firmly  pledged  for  the  satisfaction  of  the  creditor,  is  intrin- 
sically greater,  and  to  a  considerable  extent,  than  that  of  property  in  public 
debt,  which  depends  on  annual  provision.  Hence,  too,  a  creditor  to  whom 
such  a  pledge  was  not  stipulated,  may  be  justly  said  to  have  received  a  com- 
pensation for  the  relinquishment  of  a  portion  of  his  interest. 

On  the  second  point,   it  has  been  observed,  with  less  plausibility,  that  in 
this  country,  where  it  would  be  to  the  advantage  of  the  creditor  to  receive 
his  principal,  rather  than  a  rate  of  six  per  cent,  interest,  the  abridgment  of 
the  right  of  redemption  is  of  no  value. 
24 


180  REPORTS  OF  THE  [1795. 

1st.  The  proposition  is  not  universally  true. 

It  depends  on  the  particular  situation  of  a  creditor  whether  it  be  his  in- 
terest to  be  reimbursed  his  principal  or  not.  It  is  believed,  owing  to  the 
impunctuaiity  of  collections,  that  in  no  part  of  the  United  States  does  fair 
lending  at  private  interest,  upon  real  security,  nett  six  per  cent. 

2d.  As  far  as  it  is  true,  it  does  not  authorize  the  inference  which  is  drawn: 
because  the  creditor  cannot  demand  his  principal  when  it  suits  him,  but 
must  wait  till  it  is  convenient  to  the  government  to  pay.  This  convenience 
might  not  exist  till  there  was  a  fall  in  the  market  rate  of  interest,  and  then 
it  would  not  be  the  interest  of  the  creditor  to  receive. 

Unable  to  exact  the  principal  when  he  pleases,  it  is  a  material  point  gained 
to  be  able  to  arrest  the  hand  of  the  government  from  paying  him,  when  it 
is  his  interest  not  to  receive.  It  is  evident,  that,  whenever  the  rate  of  in- 
terest to  which  he  is  entitled,  shall  exceed  the  market  rate,  if  he  cannot  be 
obliged  to  receive  back  his  principal,  or  take  the  market  rate,  his  stock 
must  rise  in  value  in  proportion  to  the  difference  and  the  degree  of  its 
duration. 

Nor  is  an  idea  which  has  been  entertained  just,  that  this  advantage  is 
remote  and  contingent;  to  accrue  only  to  those  who  may  be  holders  at  the 
time  of  the  fall  of  interest,  at  the  expense  of  those  who  were  holders  when 
the  funding  act  passed;  many  of  whom,  as  it  is  alleged,  being  obliged  to 
alienate,  then  or  shortly  after,  suffered  loss  in  the  sale  from  the  postpone- 
ment of  a  part  of  their  interest,  without  benefiting  by  the  supposed  equiva- 
lents. 

The  fairness  of  an  equivalent  ought  never  to  be  tested  by  the  necessities 
of  particular  individuals.  It  ought  to  be  estimated  by  the  general  princi- 
ples of  value;  by  the  natural  and  real  operation  of  things.  Admitting,  there- 
fore, the  suggestion  as  to  such  individuals  to  be  true,  it  would  decide  nothing. 

But  it  is  not  true.  The  permanency  of  a  high  rate  of  interest,  and  the 
possibility  of  a  future  rise  of  the  capital  above  par,  by  a  fall  of  the  market 
rate  below  the  stipulated  rate,  were,  to  the  first  holders  of  stock,  circum- 
stances of  present  value. 

Foreigners,  especially,  whose  purchases  would  necessarily  influence  the 
market,  would  give  higher  prices  for  it  on  these  accounts. 

And  when  to  this  are  added,  the  funding  of  the  new  stock  and  the 
payment  of  the  interest  quarter  yearly — there  is  solid  ground  for  enter- 
taining an  opinion  that  the  stock  has,  from  the  earliest  period,  borne  a  better 
price  in  the  market  than  upon  the  principle  of  an  annual  payment  of  six 
per  cent,  on  the  whole  capital  depending  upon  an  annual  provision. 

This  opinion  would  be  confirmed,  if  we  should  take  as  a  guide  what  ac- 
tually happened  in  one  or  more  of  the  States,  which  made  annual  provision 
for  the  payment  of  interest  upon  their  debts,  at  the  stipulated  rate  of  six 
per  cent.  With  this  provision  the  market  price  of  their  stock  rarely  ex- 
ceeded 33§  per  centum. 

It  is  probable  that  greater  confidence  in  the  ability  and  constancy  of  views 
of  the  government  of  the  United  States,  might  have  given  a  greater  value 
to  their  stock  in  a  like  situation.  But  it  is  not  to  be  doubted  that  it  would 
have  felt,  in  a  great  degree,  a  similar  effect  of  that  situation. 

This  may  not  appear  with  respect  to  the  small  amount  of  unsubscribed 
debt,  now  to  be  provided  for,  and  with  the  advantage  of  a  confirmation  of 
confidence  by  experience;  but  it  could  not  haAre  failed  to  have  been  very 
apparent,  if  the  whole  debt  had  been  provided  for  on  this  plan. 


1795.]  SECRETARY  OF  THE  TREASURY.  jgl 

These  observations  serve  to  render  it  probable  that  the  creditors  who 
have  accepted  the  terms  offered  by  the  government,  have  not  been  injured 
by  the  acceptance — that  if  they  had  now  an  option  to  change  their  ground 
for  that  which  is  proposed  for  non-subscribers,  it  would  be  an  ill  judged 
choice  in  them  to  do  it;  and  that,  upon  these,  as  well  as  other  accounts,  they 
will  have  no  cause  to  be  dissatisfied  with  the  proposal  under  consideration. 

Let  it  be  added,  that,  whether  the  non-subscribers  shall  fare  better  or  not 
by  that  proposal  than  the  subscribers,  it  is  the  interest  of  all  the  public  cre- 
ditors, upon  principle  and  precedent,  that  the  public  faith  should  be  preserv- 
ed towards  those  non-subscribers. 

But,  at  the  same  time,  every  consideration  connected  with  the  question 
urges  that  nothing  more  should  be  done  for  non-subscribers  than  is  positive- 
ly due  to  good  faith.  Accordingly,  the  proposition  contemplates  that  their 
debt  shall  not  he  funded,  but  that  provision  shall  be  annually  made. 

With  regard  to  arrears  of  interest,  a  tenth  part  only  is  proposed  to  be 
paid  on  the  first  of  January,  1796.  At  this  rate,  they  would  be  paid  off  in 
ten  years. 

In  strictness,  they  ought  to  be  immediately  discharged.  But  to  have 
done  this  on  the  whole  debt,  would  have  been  impracticable:  to  do  it  on 
what  now  remains  unsubscribed,  would  not  only  be  unequal,  but  would, 
at  the  present  moment,  obstruct  arrangements  which  are  conducive  to  the 
general  interests  of  the  creditors.  The  state  of  the  Treasury  in  succeeding 
years  will  enable  Congress  to  decide  how  far  the  payment  can  be  accelerated. 
In  the  mean  time,  the  creditors  have  an  option  to  separate  these  arrears  from 
the  principal,  and  to  fund  them  at  three  per  cent,  as  has  been  done  generally 
with  regard  to  interest.  The  case  of  a  large  arrear  of  interest,  arising  from 
the  inability  of  a  former  government,  which  is  the  present  case,  is  liable  to 
some  peculiar  considerations. 

A  difference  is  made  in  the  special  case  of  the  Loan  Office  certificates, 
which  by  contract  are  entitled  to  interest  of  6  per  cent,  on  the  nominal 
principal,  redeemable  only  by  payment  of  the  specie  principal. 

This  is  too  disadvantageous  a  footing  for  the  government. 

The  alternative  most  convenient  at  this  time,  is  to  pay  off  the  debt,  which 
is  proposed.  To  elude  this  contract,  would  be  to  sacrifice  a  very  great  prin- 
ciple to  a  very  little  interest. 

The  amount  will  be  seen  in  the  statement  A. 

Remarks  on  the  Second  Proposition. 

The  certificates,  or  bills  of  credit,  called  new  emission  money,  were  emit-* 
ted  pursuant  to  a  resolution  of  Congress,  of  the  18th  March,  1780,  which 
directs  them  to  be  emitted  upon  the  funds  of  individual  States,  to  bear  an 
interest  of  five  per  centum  per  annum,  payable  in  specie  at  the  redemption  of 
the  bills;  or,  at  the  election  of  the  holder,  annually,  at  the  Continental 
Loan  Offices  in  sterling  bills  drawn  by  the  United  States  upon  their 
Commissioners  in  Europe,  and  pledges  the  faith  of  the  United  States  for 
the  payment  of  the  said  bills,  in  case  any  State  on  ivhose  funds  they 
should  be  emitted,  should  by  the  events  of  war  be  rendered  incapable  to 
redeem  them;  directing,  also,  an  endorsement  to  be  made  upon  each  bill  in 
these  words:  "The  United  States  insure  the  payment  of  the  within  bill, 
and  will  draw  bills  of  exchange  for  the  interest  annually,  if  demanded,  ac- 
cording to  a  resolution  of  Congress,  of  the  18th  of  March,  17S0." 


182  REPORTS  OF  THE  [1795, 

These  resolutions^,  and  the  endorsement,  upon  the  bills,  engage  the  absolute 
promise  of  the  United  States  for  the  payment  of  the  interest  indefinitely, 
and  their  eventual  guarantee  of  the  principal,  in  case  any  State  on  whose 
funds  the  bills  should  be  emitted,  should  by  the  events  of  war  be  rendered 
incapable  to  redeem  them;  which  is,  in  effect,  though  not  in  form,  an  abso- 
lute guarantee  of  the  principal;  for  the  United  States  are  bound  to  pay  the 
interest  perpetually  till  that  is  discharged. 

Good  faith  demands  that  the  United  States  should  supply  the  omissions  of 
the  States  which  issued  the  bills,  by  providing  themselves  at  least  for  the  in- 
terest upon  them. 

But  it  is  not  as  easy  to  pronounce  on  what  terms  they  ought  to  be  provided 
for. 

On  their  face,  and  according  to  the  unrevoked  resolutions  of  Congress, 
they  are  of  specie  value  equal  to  their  nominal  amount,  and  bearing  5  per 
cent,  interest. 

But  it  is  known  that  they  were  issued  by  different  States,  at  different  va- 
lues, fixed  by  previous  laws.  The  true  nature  of  the  contract,  therefore,  in 
fact,  and  the  true  equity  of  the  case,  are,  from  these  circumstances,  involved 
in  some  question. 

A  compromise  by  a  new  agreement,  seems  the  best  road  out  of  the  dif- 
ficulty. 

This  is  the  aim  of  the  proposition,  which,  it  is  hoped,  will,  in  the  main, 
reasonabty  consult  all  interests. 

There  have  been  special  references  of  this  subject  to  the  Secretary,  but 
he  purposely  declined  a  report  till  the  expiration  of  the  term  limited  by  the 
act,  entitled  "  An  act  relative  to  claims  against  the  United  States  not  barred 
by  any  act  of  limitation,  and  which  have  not  been  already  adjusted, "  passed 
the  12th  of  February,  1793,  had  obviated  a  danger  to  which  the  business 
was  exposed.  It  is  now  ascertained  that  the  amount  for  which  the  United 
States  shall  be  in  future  liable,  is  ninety  thousand  five  hundred  and  seventy- 
four  dollars.  The  sum's  subscribed  to  the  loan,  will,  of  course,  be  a  charge 
against  the  States  which  respectively  issued  the  bills. 

Remarks  on  the  Third  Proposition. 

The  payment  of  interest  and  instalments  of  principal  of  our  foreign  debt, 
in  the  countries  where  it  was  contracted,  is  found  by  experience  to  be  at- 
tended with  difficulty,  embarrassment,  some  loss,  and  a  degree  of  casualty 
which  occasionally  puts  in  jeopardy  the  national  credit.  Loans  for  reim- 
bursement must  be  made  before-hand,  as  the  market  sui Is,  and  necessarily 
involve  double  interest  for  a  greater  or  less  time.  The  procuring  of  bills  to 
be  remitted  for  payment  of  interest,  cannot  be  depended  upon  in  coincidence 
with  the  periods  of  payment,  which,  co-operating  with  distance,  renders  in- 
convenient anticipations  necessary. 

The  remitting  in  commodities  would  be  liable  to  other  casualties,  and  to 
some  peculiar  objections;  and  whatever  mode  be  adopted,  it  maybe  fre- 
quently not  practicable  to  deposite  in  season  the  necessary  funds  on  the  spot, 
without  great  sacrifices.  If,  therefore,  the  place  of  these  payments  could, 
with  consent  of  the  creditors,  upon  an  equitable  indemnification  to  them  for 
the  transfer,  be  changed  to  the  United  States,  the  operation  would  be  in  va- 
rious lights  beneficial.  It  has  occurred  that  the  present  posture  of  the  affairs- 
of  Europe,  might  favor  apian  of  this  kind,  and  perhaps  produce  some  colla- 


1795.]  SECRETARY  OF  THE  TREASURY.  183 

teral  advantages.  Under  this  idea  an  experiment  is  proposed.  The  pro- 
posed augmentation  of  interest  is  intended  as  an  indemnification  for  the  ex- 
pense and  hazard  of  agencies  in  this  country,  delays  in  remittance,  inconve- 
nience of  distant  negotiation,  renunciation  of  the  facilities  which  attend  the 
receipt  of  interest  at  home,  risks  of  loss  by  exchange,  &c,  and  is  calculated 
on  a  liberal  scale,  in  order  to  induce  an  acceptance  of  the  proposition. 

If,  instead  of  an  increase  of  interest,  the  option  of  an  equivalent  be  given 
byway  of  premium,  in  stock  bearing  an  interest  of  5  per  cent,  it  would 
have  attractions  for  certain  creditors,  and  would  facilitate  the  success  of  the 
measure.  On  strict  calculation,  the  equivalent  would  be  6  dollars  and  58 
eents  per  100  dollars  of  the  principal  subscribed.  It  is  not  perceived  that 
the  interests  of  the  United  States  could  suffer  by  allowing  the  alternative. 
The  fixing  of  the  rate  of  interest,  by  postponing  the  reimbursement  to  the 
year  1818,  would  also  be  a  powerful  inducement.  And  till  the  period  of 
reimbursement  arrives,  any  surplus  of  the  Sinking  Fund  which  may  exist, 
ean  be  invested  in  purchases,  so  as  to  prevent  the  progress  of  the  fund  being 
arrested. 

It  could  not  be  necessary  to  observe,  except  for  the  sake  of  dispelling 
jealousy  or  apprehension  on  the  part  of  the  creditors,  that  ivhile  the  plan  is 
in  experiment,  and  afterwards,  with  regard  to  all  who  do  not  embrace 
it,  every  thing  is  to  proceed  as  heretofore,  and  as  the  contracts  respecting 
the  debt  require. 

The  auxiliary  proposition  of  giving  power  to  the  Commissioners  of  the 
Sinking  Fund  to  remit  certificates  for  sale,  is  founded  upon  a  belief  that  this 
operation  will  sometimes  be  practicable,  where  direct  loans  cannot  be  ef- 
fected,'and  will  be  occasionally  a  more  beneficial  mode  of  remittance  than  by 
bills  of  exchange. 

Remark  on  the  Fourth  Proposition. 

The  object  of  this  proposition  is  to  give  moral  certainty  to  the  adequate* 
ness  of  the  fund  for  paying  the  interest  upon  the  debt,  and  for  its  ultimate 
redemption,  making  a  reasonable  allowance  for  the  casualties  to  which  it  is 
exposed. 

Remarks  on  the  Fifth  Proposition. 

There  is  no  sentiment  which  can  better  deserve  the  serious  attention  of 
the  legislators  of  a  country,  than  the  one  expressed  in  the  speech  of  the  Pre- 
sident, which  indicates  the  danger  to  every  government  from  the  progress- 
ive accumulation  of  debt.  A  tendency  to  it  is,  perhaps,  the  natural  disease 
of  all  governments;  and  it  is  not  easy  to  conceive  any  thing  more  likely  than 
this,  to  lead  to  great  and  convulsive  revolutions  of  empire. 

On  the  one  hand,  the  exigencies  of  a  nation,  creating  new  causes  of  expen- 
diture, as  well  from  its  own,  as  from  the  ambition,  rapacity,  injustice,  intern-^ 
perance,  and  folly  of  other  nations,  proceed  in  unceasing  and  rapid  succes- 
sion. On  the  other,  there  is  a  general  propensity  in  those  who  administer 
the  affairs  of  a  government,  founded  in  the  constitution  of  man,  to  shift  off 
the  burden  from  the  present  to  a  future  day;  a  propensity  which  may  be  ex- 
pected to  be  strong  in  proportion  as  the  form  of  a  State  is  popular. 

To  extinguish  a  debt  which  exists,  and  to  avoid  contracting  more,  are  ideas 
always  favored  by  public  feeling  and  opinion;  but  to  pay  taxes  for  the  one 
or  the  other  purpose,  which  are  the  only  means  of  avoiding  the  evil,  is  al- 
ways, more  or  less,  unpopular.      These  contradictions  are  in  human  nature; 


184  REPORTS  OF  THE  [1795. 

and  happy,  indeed,  would  be  the  lot  of  a  country  that  should  ever  want  men 
ready  to  turn  them  to  the  account  of  their  own  popularity,  or  to  some  other 
sinister  account. 

Hence  it  is  no  uncommon  spectacle  to  see  the  same  men  clamoring  for 
occasions  of  expense,  when  they  happen  to  be  in  unison  with  the  present 
humor  of  the  community,  whether  well  or  ill  directed,  declaiming  against 
a  public  debt,  and  for  the  reduction  of  it  as  an  abstract  thesis;  yet  vehement 
against  every  plan  of  taxation  which  is  proposed  to  discharge  old  debts,  or  to 
avoid  new,  by  defraying  the  expenses  of  exigencies  as  they  emerge. 

These  unhandsome  arts  throw  artificial  embarrassment  in  the  way  of  the 
administrators  of  a  government;  and,  co-operating  with  the  desire  which  they 
themselves  are  too  apt  to  feel  to  conciliate  public  favor,  by  declining  to  lay 
even  necessary  burthens,  or  with  the  fear  of  losing  it,  by  imposing  them 
with  firmness,  serve  to  promote  the  accumulation  of  debt,  by  leaving  that 
which  exists  without  adequate  provision  for  its  reimbursement,  and  by  pre- 
venting the  levying,  with  energy,  new  taxes,  when  new  occasions  of  ex- 
pense occur.  The  consequence  is,  that  the  public  debt  swells  till  its  magni- 
tude becomes  enormous,  and  the  burthens  of  the  people  gradually  increase, 
till  their  weight  becomes  intolerable.  Of  such  a  state  of  things,  great  dis- 
orders in  the  whole  political  economy,  convulsions  and  revolutions  of  go- 
vernment, are  a  natural  offspring. 

There  can  be  no  more  sacred  obligation,  then,  on  the  public  agents  of  a 
nation,  than  to  guard,  with  provident  foresight  and  inflexible  perseverance, 
against  so  mischievous  a  result.  True  patriotism  and  genuine  policy  cannot, 
it  is  respectfully  presumed,  be  better  demonstrated  by  those  of  the  United 
States,  at  the  present  juncture,  than  by  improving,  efficaciously,  the  very 
favorable  situation  in  which  they  stand,  for  extinguishing,  with  reasonable 
celerity,  the  actual  debt  of  the  country,  and  for  laying  the  foundation  of  a 
system  which  may  shield  posterity  from  the  consequences  of  the  usual  im- 
providence and  selfishness  of  its  ancestors,  and  which,  if  possible,  ma}?  give 

IMMORTALITY  to  PUBLIC  CREDIT. 

Fortunately  for  the  first  object,  the  circumstances  in  our  foreign  affairs, 
which,  during  the  last  session,  impelled  to  an  extension  of  the  national  reve- 
nues, have  left  little  more  to  do  than  to  apply  the  existing  means  with  deci- 
sion and  efficacy. 

The  second  object  will  depend  on  the  establishment  of  wise  principles  in 
that  application,  fitted  to  become  a  permanent  precedent  in  the  fiscal  system 
of  the  country. 

The  first  report  of  the  Secretary  on  the  subject  of  the  public  debt,  of  the 
9th  of  January,  1790,  suggests  the  idea  of  "  incorporating,  as  a  fundamen- 
tal maxim  in  the  system  of  public  credit  of  the  United  States,  that  the  cre- 
ation of  debt  should  always  be  accompanied  with  the  means  of  extinguish- 
ment; that  this  is  the  true  secret  for  rendering  public  credit  immortal,  and 
that  it  is  difficult  to  conceive  a  situation  in  which  there  may  not  be  an  ad- 
herence to  the  maxim;"  and  it  expresses  "an  unfeigned  solicitude,  that 
this  may  be  attempted  by  the  United  States,  and  that  they  may  commence 
their  measures  for  the  establishment  of  credit  with  the  observance  of  it.* 

*  It  is  understood  that  the  Parliament  of  Great  Britain  has,  within  the  last  four  years,  for- 
mally adopted,  as  a  standing  rule,  the  principle  of  incorporating,  with  the  creation  of  debt,  the 
means  of  extinguishment.  How  much  easier  must  the  execution  of  this  important  principle 
be  to  the  United  States  than  to  a  nation  which,  before  it  began,  had  so  deeply  mortgaged  its 
resources!  Let  the  United  States  never  have  to  regret,  hereafter,  that  they  postponed  too 
long  so  provident  a  precaution. 


1795.]  SECRETARY  OF  THE  TREASURY.  185 

No  opportunity  has  been  lost  by  the  Secretary,  as  far  as  he  could  contri- 
bute to  the  event,  to  reduce  this  principle  to  practice;  and  important  steps  to- 
wards it  have  been,  from  time  to  time,  taken  by  the  Legislature. 

But  much  remains  to  be  done  to  give  it  full  effect.  The  present  state  of 
things  encourages  and  invites  to  the  consummation  of  the  plan.  And  the 
Secretary,  about  to  leave  the  office  he  holds,  feels  it  a  peculiar  duty  to  make 
a  final  effort  to  promote  that  invaluable  end. 

This  is  the  object  of  the  5th  proposition,  aided  by  the  preliminary  provi- 
sions of  the  4th.  This  proposition  aims  at  two  principal  points:  1.  To  con- 
stitute a  fund  sufficient,  in  every  supposable  event,  for  extinguishing  the 
whole  of  the  present  debt  of  the  United  States,  foreign  and  domestic,  in  a 
period  not  exceeding  thirty  years.  2.  To  fix  its  destination  unchange- 
ably, by  not  only  appropriating  it  permanently,  under  the  direction  of  com- 
missioners, and  vesting  it  in  them  as  property  in  trust,  but  by  making  its 
faithful  application  a  part  of  the  contract  with  the  creditors. 

As  to  the  first  point.  If  the  temporary  duties  on  imports  be  rendered  per- 
manent, the  annual  reservation  of  $600,000  postponed,  and  if  the  additional 
appropriations  which  are  proposed,  be  made  to  the  sinking  fund,  its  intended 
force  will  not  only  be  equal  to  the  effect  meant  to  be  produced,  but  it  may 
be  hoped  that  there  is  scarcely  a  casualty  which  can  reasonably  be  taken 
into  calculation,  foreign  war  not  excepted,  which  will  occasion  a  deficiency 
in  the  fund. 

The  whole  amount  of  the  duties  on  imports  and  tonnage,  and  upon  do- 
mestic distilled  spirits  and  stills,  estimated  now  to  amount  to  $6,079,418  58, 
besides  the  dividends  on  bank  stock,  and  the  items  which  now  compose  the 
sinking  fund,  will  then  be  appropriated,  primarily,  to  the  interest  upon  the 
public  debt,  and  to  the  sinking  fund:  which,  together,  including  the  deferred 
stock,  will  demand,  permanently,  from  that  revenue,  $4, 373,836  03,  little 
more  than  two-thirds  of  the  fund  from  which  they  arise.  An  expectation 
may  be  indulged,  that  even  foreign  war,  making  due  allowance  for  what  will 
always  be  practicable  through  neutral  powers,  would  not  occasion  a  defalca- 
tion in  the  revenues  greater  than  the  difference.  This  competency  of  the 
fund  is  an  essential  idea.  The  fulfilment  of  the  object,  as  far  as  the  uncer- 
tainty of  human  affairs  will  permit,  ought  to  be  superior  to  casualty. 

The  necessity  of  a  reliance  on  auxiliary  provisions,  always  precarious  in 
those  situations  which  affect  the  productiveness  of  the  public  revenues,  ought 
to  be,  as  far  as  practicable,  superseded  by  the  ample  nature  of  the  provision. 
As  to  the  second  point.  The  intent  is  to  secure,  by  all  the  sanctions  of 
which  the  subject  is  susceptible,  an  inviolable  application  of  the  fund,  accord- 
ing to  its  destination.  No  expedients  more  powerful  can  be  devised  for  this 
purpose  than  to  clothe  it  with  the  character  of  private  property r,  and  to  en- 
gage absolutely  the  faith  of  the  government,  by  making  the  application  of 
it  to  the  object,  a  part  of  the  contract  with  the  creditors. 
But  is  this  necessary  ? 

Its  necessity  rests  on  these  cogent  reasons:  The  inviolable  application  of 
an  adequate  sinking  fund  is  the  only  practicable  security  against  an  excessive 
accumulation  of  debt,  and  the  essential  basis  of  a  permanent  national  credit. 
Experience  has  shown,  in  countries  the  most  attentive  to  the  principles  of 
credit,  that  a  simple  appropriation  of  the  sinking  fund  is  not  a  complete  bar- 
rier against  its  being  diverted,  when  immediate  exigencies  press.  The  causes 
which  have  been  stated  with  another  view,  tempt  the  administrators  of  go- 
vernment to  lay  hold  of  this  resource  rather  than  resort  to  new  taxes.     This 


136  REPORTS  OF  THE  [1795. 

indicates  the  utility  of  endeavoring  to  give,  by  additional  sanctions,  inviola- 
bility to  the  fund. 

But  will  those  proposed  answer  the  end  ? 

They  are  the  most  efficacious  that  can.  be  imagined,,  and  they  are  likely 
to  be  entirely  efficacious.  They  cannot  be  disregarded,  without,  by  breach  of 
faith  and  contract,  destroying  credit,  and  at  a  juncture,  too,  when  it  is  most 
indispensable.  The  emergencies  which  induce  a  diversion  of  the  fund,  are 
those  in  which  loans,  and,  consequently,  credit,  are  most  needed. 

But  will  it  be  safe  to  put  the  fund  so  entirely  out  of  the  command  of  the 
government?  May  there  not  be  situations  in  which  the  command  of  it  may 
be  requisite  to  the  safety  of  the  State? 

This  is  not  conceivable  The  amount  of  the  sinking  fund  will,  in  the 
situations  which  create  extraordinary  demands  for  money,  be  always  incon- 
siderable, compared  even  with  a  single  year's  expenditure.  The'  current  reve- 
nues of  a  nation  do  not,  in  such  cases,  suffice.  Plunder  or  credit  must  supply 
the  deficiency.  The  first  presupposes  a  subversion  of  all  social  order.  The 
second  will  find  its  best  support  and  greatest  efficacy  in  adhering  steadiiy  to 
the  principles  of  such  a  fund.  An  annuity  of  seven  dollars  will  pay  the  in- 
terest upon  and  discharge  a  capital  of  one  hundred  dollars,  bearing  six  per 
cent,  interest,  in  thirty -three  and  a  third  years,  nearly.  The  situation  of  a 
country  must  be  not  a  little  exhausted,  if  it  cannot  create  yearly,  by  new  re- 
venues, during  the  continuance  of  a  foreign  war,  an  annuity  on  the  above 
scale  sufficient  to  fund  the  loans  of  which  it  may  stand  in  need.  Ten  mil- 
lions of  dollars  will,  with  order  and  economy,  maintain,  in  this  country,  an 
army  of  fifty  thousand  men  for  a  year.  Viewing  our  geographical  position, 
is  there  a  prospect  of  any  war  expensive  beyond  this  ratio  ?  If  not,  an  an- 
nuity of  seven  hundred  thousand  dollars,  created  each  year  of  the  war, 
would  suffice.  But  it  would  be  wise,  in  such  an  event,  to  carry  taxation,  in 
the  first  instance,  to  the  full  extent  of  the  ability  of  the  State,  which  would 
proportionably  contract  the  necessity  for  borrowing,  and,  consequently,  the 
extent  of  the  annuities  necessary  for  loans. 

If  a  nation  can  find  embarrassment  in  creating  the  revenues  requisite  on 
this  scale,  it  must  arise  from  her  having  reached  a  stage  when,  from  the  ne- 
glect of  the  principle  now  inculcated,  the  mass  of  her  debt  has  become  so 
enormous  as  to  strain  her  faculties  in  order  to  a  provision  for  it. 

The  United  States  are  in  a  situation  altogether  different.  An  inspection 
of  the  list  of  their  revenues  discovers  that  they  have  a  large  field  of  resource 
unexplored.  Their  youth,  and  large  tracts  of  unsettled  land,  and  land  in  the 
infancy  of  improvement,  assure  them  a  great  and  rapid  increase  of  means. 
Even  their  actual  revenues,  without  additions,  must,  with  the  progress  Gf 
the  country,  considerably  increase.  And  though  war  may  interrupt,  the 
temporary  interruption  being  removed  by  the  restoration  of  peace,  their 
increasing  productiveness,  suspended  for  a  time,  must  resume  its  vigor  and 
growth.     In  a  given  number  of  years  a  considerable  augmentation  is  certain. 

The  government  of  this  country  may,  therefore,  adopt,  fearless  of  future 
embarrassment,  a  principle,  which,  being  adopted,  will  ultimately  furnish 
resources  for  future  exigencies,  without  an  increase  of  burthen  to  the  com- 
munity. 

To  explain  this  last  idea.  It  will  readily  be  perceived  that  the  funds 
pledged  for  paying  the  interest,  and  sinking  the  principal  of  a  portion  of  the 
debt  existing  or  created  at  a  particular  time,  will,  within  a  certain  period, 
extinguish  that  portion  of  debt. 


1795.1  SECRETARY  OF  THE  TREASURY.  \&f 

They  will  then  be  liberated,  and  will  be  ready  for  any  future  use,  either 
to  defray  current  expenditures  or  be  the  basis  of  new  loans,  as  circumstances 
may  dictate.  And,  after  a  course  of  time,  it  is  a  reasonable  presumption 
that  the  funds  so  successively  liberated  will  be  adequate  to  new  exigencies 
as  they  occur. 

Moreover,  the  last  clause  of  the  proposition  authorizes  the  deriving  aid 
from  the  sinking  fund  for  new  loans,  whenever  the  state  of  the  fund  admits 
of  it,  consistently  with  the  accomplishment  of  its  purposes;  that  is,  when  it 
is  sufficient, — 1st,  to  make  good  the  payments  on  account  of  the  principal  of 
the  debt  as  they  accrue  ;  2d,  to  purchase  in  the  market  all  that  part  of  the 
public  debt  of  which  there  is  no  stipulation  of  payment  by  instalment,  (as 
the  three  per  cent,  stock,)  within  a  period  of  thirty  years. 

This,  while  it  secures  the  extinction  of  the  existing  debt,  within  a  rea- 
sonable term,  by  preventing  too  great  a  proportion  of  the  public  revenue 
from  being  tied  up  by  the  sinking  fund,  gives  due  weight  to  the  considera^ 
tion  of  providing  for  future  emergencies. 

The  same  consideration  has  governed  in  proposing,  (instead  of  the  appro- 
priation of  a  definite  sum  out  of  the  revenue  from  imports  and  tonnage, 
which,  in  certain  years,  would  be  greater  than  will  be  permanently  necessary,) 
that  the  sum  to  be  applied  out  of  that  revenue  shall  be  so  much,  from  )Tear 
to  year,  as  with  the  other  items  of  the  sinking  fund  will  suffice  for  the  object. 
It  has  likewise  influenced  in  postponing  the  redemption  of  that  stock  which 
stands  to  the  credit  of  certain  States,  in  consequence  of  the  report  of  the 
Commissioners  for  settlement  of  accounts. 

Every  system  of  public  credit  must  assume  it  as  a  fundamental  principle, 
that  the  resources  of  the  country  are  equal  to  its  probable  exigencies,  and 
that  it  will  possess  ability  to  pay  the  debts  which  it  contracts.  If  this  be  so? 
there  is  no  cause  to  hesitate  about  the  inviolable  appropriation  of  funds  to 
the  extinction  of  an  existing  debt,  within  no  less  a  term  than  thirty  years. 

Indeed  as  before  intimated,  it  cannot  be  doubted  that  the  resources  of  a 
credit  built  upon  a  foundation  so  solid  as  that  which  is  recommended,  wilt 
more  than  replace,  even  in  the  earliest  stages  of  our  affairs,  the  use  of  the 
additional  funds  withdrawn  from  the  command  of  the  government  to  effect 
it,  and  in  the  eventual  operation  will  give  a  more  abundant  command  of 
fands  than  it  can  otherwise  have.  The  successive  liberation  of  the  revenues 
successively  pledged,  after  accomplishing  their  object,  will  afford  resources 
that  may  almost  be  said  to  be  inexhaustible. 

It  should  be  recollected,  too,  that  the  public  arrangements  may,  under  a 
great  pressure,  anticipate  the  approaching  period  of  such  a  liberation,  by  in- 
termediate temporary  loans,  to  be  replaced  by  those  funds  when  they  are 
free. 

This  proposition  exemplifies,  as  to  the  past,  the  nature  of  the  maxim 
which  has  been  supposed  capable  of  giving  immortality  to  credit,  namely: 
that  with  the  creation  of  debt,  should  be  incorporated  the  means  of  extin- 
guishment: which  means  are  two  fold;  1.  the  establishing  at  the  time  of 
contracting  a  debt,  funds  for  the  reimbursement  of  the  principal,  as  well  as 
for  the  payment  of  interest  within  a  determinate  period.  2.  The  making 
it  a  part  of  the  contract,  that  the  fund  so  established  shall  be  inviolably 
applied  to  the  object. 

It  is   believed  that  it  would  be  happy  for  the  United  States,  if  Congress 
would  adopt  this  principle  as  a  rule  in  all  future  loans---never  to  be  departed 
1      25 


188  REPORTS  OF  THE  [1795. 

from — and  a  good  evidence  of  this  determination  will  be  to  apply  it  to  the 
past. 

This  would  be  at  the  same  time  an  antidote  against  what  may  be  pro- 
nounced the  most  plausible  objections  to  the  system  of  funding  public  debts; 
which  are,  that,  by  facilitating  the  means  of  supporting  expense,  they  en- 
courage to  enterprises  which  produce  it;  and  by  furnishing  in  credit  a  sub- 
stitute for  revenue,  likely  to  be  too  freely  used  to  avoid  the  odium  of  laying 
new  taxes,  they  occasion  a  tendency  to  run  in  debt.  Though  these  objec- 
tions to  funding  systems,  which,  giving  the  greatest  possible  energy  to  public 
credit,  are  a  great  source  of  national  security,  strength,  and  prosperity,  are 
very  similar  to  those  which  speculative  men  urge  against  national  and  in- 
dividual opulence,  drawn  from  its  abuses;  and  though,  perhaps,  upon  a  care- 
ful analysis  of  facts,  they  would  be  found  to  have  much  less  support  in  them 
than  is  imaginedTattributihg  to  those  systems  effects  which  are  to  be  ascribed 
more  truly  to  the  passions  of  men,  and  perhaps  to  the  genius  of  particular 
governments;  yet,  as  they  are  not  wholly  unfounded,  it  is  desirable  to  guard, 
as  far  as  possible,  against  the  dangers  which  they  suppose,  without  renouncing 
the  advantages  which  these  systems  undoubtedly  afford. 

It  will  readily  be  seen,  that  the  maxim  pf  making  concurrent  provision 
for  the  principal  as  well  as  interest,  in  the  act  of  contracting  debt,  if  by  pre- 
cedent and  habit  it  can  be  rendered  a  rule  of  administration,  by  impli- 
cating a  greater  portion  of  the  revenue  in  every  such  operation  than  would 
be  requisite  for  a  mere  provision  for  interest,  will  control  proportionably  the 
disposition  to  defer  the  burthen  to  futurity,  and  create  a  greater  necessity 
for  circumspection  in  incurring  expense. 

It  is  probably  the  true  expedient  for  uniting  a  due  regard  to  the  present 
accommodation  of  the  community,  with  a  due  care  not  to  overburthen  pos- 
terity— the  full  energy  of  public  credit,  with  a  salutary  restraint  upon  the 
abuses  of  it. 

To  this  explanation  of  the  general  principles  of  the  5th  proposition,  it 
may  be  proper  to  add  some  brief  notes  on  particular  parts  of  it. 

It  is  proposed  that  the  redemption  of  the  present  six  per  cent,  stock,  shall 
commence  on  the  1st  of  January,  179G.  This  time  of  commencement  is 
recommended  by  several  reasons:  I.  It  ought  to  be  such  as  to  admit  of 
sufficient  notice  to  distant  creditors.  2.  It  will  favor  order  to  date  the  com- 
mencement of  every  new  pecuniary  operation,  where  there  is  an  option,  and 
no  particular  reason  to  the  contrary,  with  the  commencement  of  the  natural 
year.  3.  The  moment  of  payment  presupposes  that  the  annuity  to  be  paid 
has  actually  accrued,  which  will  not  be  the  case  till  the  end  of  the  present 
year.  4.  The  small  delay,  by  not  forcing  the  means,  will  facilitate  the  future 
execution. 

It  is  a  part  of  the  plan  to  make  provision  for  reimbursing  the  remaining 
instalments  of  the  two  million  loan  had  of  the  Bank  of  the  United  States, 
pursuant  to  the  act  of  incorporation.  The  preceding  instalments  have  been 
reimbursed  out  of  the  proceeds  of  foreign  loans.  This  resource  cannot  in 
future  be  relied  upon,  and  for  such  a  purpose  it  is  not  as  eligible  as  a  do- 
mestic one,  though  circumstances  have  hitherto  dictated  a  recurrence  to  it. 
By  making  the  dividends  on  the  stock  auxiliary  for  this  purpose  to  the  reve- 
nue from  taxes,  the  object  is  effected  with  little  more  than  half  the  sum  from 
that  revenue;  and,  in  the  end,  a  fund  is  formed  from  the  dividends,  which, 
with  a  small  addition,  suffices  for  the  redemption  of  the  deferred  stock.  A? 
these  instalments  are  yearly  falling  due,  and  must  be  paid  as  they  accrue, 


1795.1  SECRETARY  OF  THE  TREASURY.  189 

it  is  essential  that  a  provision  for  them  be  contemplated  in  the  general  ar- 
rangement requisite  to  the  completion  of  our  system  of  credit.  There  is 
perhaps  no  easy  alternative  to  what  is  proposed,  except  the  sale  of  the  stock. 
But  waiving  other  weighty  considerations  against  such  a  measure,  it  is,  in 
the  view  of  a  true  economy,  liable  to  the  most  solid  objections. 

It  is  morally  certain,  that  the  dividends  on  the  stock  will  increase,  and 
the  value  of  the  capital,  from  this  and  collateral  causes,  more  than  propor- 
tionably.  There  is  no  momentary  urgency  to  induce  the  relinquishment  of 
this  future  advantage.  To  sell  at  present,  would  be  to  abandon  the  difference 
without  necessity.  It  cannot  be  expedient  in  a  government  to  part  with  a 
capital,  which  at  the  time  produces  as  great  or  a  greater  revenue  than  can  be 
realized  from  the  proceeds  of  a  sale,  however  invested;  and  which  has  an 
inherent  tendency  to  future  augmentation.  The  measure,  too,  would  be  to 
renounce  or  lessen  a  most  convenient  resource  for  forming  the  redeeming 
fund  of  the  deferred  stock. 

It  is  proposed  to  carry  the  proceeds  of  the  sales  of  the  western  lands  to 
the  sinking  fund.  This  is  to  execute  the  intention  of  the  funding  act,  which 
has  not  organized  the  mode  of  application;  and  it  has  the  advantage  of  com- 
bining in  one  system  all  the  provisions  for  extinguishing  the  debt. 

It  is  proposed,  that  all  surplusses  of  revenue  shall  at  a  certain  time  be  carried 
to  the  use  of  the  sinking  fund.  This  is  to  extend  and  give  effect  to  a  principle 
which  has  already  received  the  Legislative  sanction.  It  was  necessary  to 
fix  a  time  when  the  appropriation  of  the  surplus  should  become  absolute, 
and  that  this  should  be  consistent  with  a  due  opportunity  to  provide  for  the 
exigencies  of  the  public  service.  Both  these  considerations  have  been  con- 
sulted. This  measure  has,  besides,  reference  to  a  more  speedy  redemption 
of  the  debt  than  it  appears  prudent  to  attempt  by  an  absolute  appropriation 
of  more  extensive  funds.  And  the  legislators  of  to-day  would  be  entitled 
to  the  lasting  gratitude  of  their  country,  if  they  would  extend  this  auxiliary 
resource,  by  all  the  means  which  are  consistent  with  a  due  regard  to  the 
present  accommodation  of  their  constituents. 

It  is  proposed  to  authorize  the  Commissioners  of  the  Sinking  Fund,  to  pro- 
vide by  new  loans,  for  the  reimbursement  of  the  instalments  which,  from 
time  to  time,  accrue.  This  is  on  the  ground,  that  it  is  essential  to  the  per- 
fection of  the  system  of  redemption,  that  all  the  means  of  ultimate  execu- 
tion should  be  organized  in  it,  and  that  there  should  be  no  need  of  future 
provisions. 

The  last  clause  of  the  proposition  excepts  from  the  operation  of  that  clause 
the  interest  on  the  six  per  cent,  stock.  This  is  because  that  interest  is  des- 
tined to  form  the  accumulations  for  paying  the  successive  instalments  of  the 
principal  of  that  stock,  which  increase  each  year  in  a  ratio  to  the  interest 
liberated  by  each  payment. 

The  statement  E;  exhibits  the  course  of  the  sinking  fund,  as  proposed  to 
be  established. 

Remarks  on  the  Sixth  Proposition. 

This  will  be  a  useful  and  important  provision.  It  has  reference  to  a  cir- 
cumstance repeatedly  adverted  to,  the  long  credits  given  upon  the  principal 
branches  of  revenue;  from  which  it  happens  that,  though  the  fund  itself ,  or 
the  product  of  the  revenue,  is  more  than  adequate  to  an  appropriation,  yet 
the  receipts  upon  it  come  too  slowly  into  the  Treasury  to  answer  the  end, 
without  anticipation  by  temporary  loans.  Its  propriety  depends  on  the  prin* 


|90  REPORTS  OF  THE  [1795. 

ciple  suggested  under  the  last  head,  of  having  all  the  means  of  complete 
execution  organized  in  the  system  of  public  credit. 

■Remarks  on  the  Seventh  Proposition. 

It  is  a  good  rule  of  caution,  that  no  more  of  the  public  revenues  should 
be  rendered  permanent  than  is  necessary  to  give  moral  certainty  to  the  pro- 
visions which  may  be  regarded  as  the  pillars  of  public  credit.  This  idea 
will,  it  is  believed,  be  satisfied,  by  giving  permanency  to  the  now  temporary 
duties  on  imports.  Accordingly,  it  is  only  proposed  to  extend  the  duties 
mentioned  in  this  proposition,  to  the  year  1800,  and  thence  to  the  end  of 
the  next  ensuing  session  of  Congress;  which  is  on  the  ground  that  they 
ought  to  be  commensurate  in  duration  with  the  objects  which  they  are  to 
accomplish,  and  no  more. 

It  has  been  already  noticed,  that  they  are  at  present  chargeable,  together 
with  the  temporary  duties  on  imports  laid  in  the  last  session,  with  an  appro- 
priation of  1,292,137  dollars  and  3S  cents,  and  with  the  interest  of  1,000,000 
of  dollars,  authorized  to  be  borrowed,  with  a  view  to  foreign  intercourse; 
having  a  special  eye  to  an  object  very  interesting  to  the  commerce  and  feel- 
ings of  the  United  States. 

This  business  wants  a  further  arrangement:  standing,  at  present,  upon  a 
vague  and  inefficient  footing.  The  reimbursement  of  the  loan  is  not  ade- 
quately provided  for,  neither  is  the  interest;  this  being  predicated  on  funds 
which,  in  their  present  form,  would  probably  expire  after  a  product  of  two 
years. 

According  to  the  fifth  proposition,  the  temporary  duties  on  imports,  after 
the  above-mentioned  appropriation  of  1,292,137  dollars  and  38  cents  shall 
have  been  satisfied,  will  become  permanently  charged  with  the  interest  on 
the  public  debt,  the  sinking  fund,  and  the  annual  reservation  of  600,000 
dollars  for  the  support  of  government. 

If  the  duties  mentioned  in  the  sixth  proposition  are  continued  till  the  first 
of  January,  1800,  and  the  reimbursement  of  the  principal  of  the  loan,  as, 
well  as  the  interest,  is  referred  to  them,  two  good  purposes  will  be  answered: 
the  obtaining  the  loan  will  be  facilitated,  and  its  complete  reimbursement 
will  be  effected  within  the  term  allotted,  without- -an  augmentation  of  the 
permanent  debt  of  the  country.  This  makes  allowance  for  fulfilling  the 
appropriation  for  the  current  service,  already  charged  upon  this  fund. 

It  is  presumed  to  be  a  conclusive  reason  in  favor  of  the  proposition,  that 
it  aims  at  preventing  an  increase  of  permanent  debt.  If  services  of  this 
kind,  when  the  United  States  are  at  peace,  (at  least  with  civilized  powers,) 
are  made  causes  of  permanent  loans,  the  progress  of.  new  debt  will  easily 
exceed  the  extinction  of  old.  r   * 

It  appears  desirable  that  there  should  be  a  steady  effort,  as  a  rule  of  ad- 
ministration, not  to  increase  the  permanent  debt  of  the  country  by  perma- 
nent loans,  except  when  it  is  inevitable,  by  the  existence  of  a  war  with  some 
European  power. 

The  comparative  view  of  revenue  and  expenditure,  (statement  F.,)  esta^ 
blishes,  satisfactorily,  that  these  duties  cannot  be  dispensed  with,  unless  there 
be  a  substitute,  if  the  redemption  of  the  public  debt  is  to  be  seriously  entered 
upon.  And  it  is  believed  that  there  cannot  be  devised  objects  of  revenue 
more  proper  in  themselves,  nor  more  generally  acceptable  to  the  people. 
Whatever  interested  parties  may  allege,  it  seems  self-evident  that  there  can 
hardly  be  a  reasonable  question,  except  as  to  the  best  mode  of  collection. 


1795.]  SECRETARY  OF  THE  TREASURY.  jo^ 

The  objection,  that  part  of  them  falls  on  manufactures,  has  no  weight.  The 
manufactures  on  which  they  fall  are  complete  luxuries,  and  completely  esta- 
blished; consequently,  fit  objects  of  revenue.  The  increased  duties  on  the 
rival  foreign  articles,  are  a  full  protection  to  the  manufacture.  Whatever 
may  be„the  appearances  in  the  infancy  of  the  tax,  it  is  certain,  in  principle, 
that  it  will  finally  fall  on  the  consumer,  as  generally  as  duties  on  imported 
commodities. 

Remarks  on  the  Eighth  Proposition. 

This  is  to  terminate  an  embarrassment  which  has  been  experienced. 
Appropriations  are  frequently  made  for  objects,  the  extent  of  which  is  not 
precisely  known,  or  in  a  degree  casual.  To  leave  them  indefinite,  as  to 
time,  is  sometimes  to  tie  up,  unnecessarily,  a  portion  of  the  public  funds, 
which  may  ultimately  not  be  wanted  at  all  for  the  purpose  of  the  original 
appropriation. 

It  will  do  away  this  inconvenience,  and  promote  perspicuity  in  the  Trea- 
sury accounts  of  appropriations,  if  an  ultimate  period  is  fixed  when  each 
appropriation  shall  be  deemed  to  have  ceased.  Should  further  appropriations 
appear  necessary  for  the  same  objects,  new  estimates  can  be  presented,  and 
new  appropriations  made. 

The  designating  an  account  with  a  denomination  known  in  the  laws,  to 
which  the  surplusses  are  to  be  carried,  will  facilitate  future  legislative  dispo- 
sitions of  the  resulting  fund.  It  is,  however,  essential  to  the  system  of  public 
credit,  that  this  should  be  with  the  exceptions  contained  in  the  proposition. 

Remarks  on  the  Ninth  Proposition. 

This  proposition  is  calculated  to  give  simplicity  to  the  public  accounts  of 
stock  and  revenue,  which  will  conduce  to  correctness,  despatch,  econo- 
my. As  the  revenues  are  manifestly  more  than  adequate  to  the  claims  of 
all  the  creditors,  they  none  of  them  have  any  interest  in  the  distinctions 
which  now  exist,  and  which  grew  out  of  the  course  of  the  business;  and 
the  rights  of  none  of  them  will  be  affected,  because  all  who  choose  may 
continue  on  their  former  ground,  by  signifying  their  dissent  to  the  present 
plan.     It  is,  however,  presumed,  there  will  be  no  such  dissent. 

Remarks  on  the  Tenth  Proposition. 

It  is  important  to  the  fiscal  calculations,  to  ascertain  positively  the  extent 
of  every  portion  of  the  public  debt.  At  present,  the  amount  of  these  seve- 
ral items  of  it  is  deduced  from  accounts  of  the  late  war,  of  various  officers 
and  offices — in  some  instances  conducted  with  little  order.  There  is  not, 
therefore,  sufficient  certainty.  Indeed,  it  is  probable,  from  the  length  of  time 
which  has  elapsed  without  their  appearing,  that  the  computed  amount 
exceeds  the  real. 

Besides,  they  are,  from  their  nature,  subject  to  forgeries  and  counterfeits, 
which  implies  a  danger  of  loss  to  the  public,  till  their  circulation  is  finally 
terminated.  The  proposition,  accordingly,  besides  the  obtaining  of  better 
information,  aims  at  obviating  this  danger. 

Allowing  sufficient  time  for  bringing  them  in  to  be  exchanged  for  certifi- 
cates of  equivalent  tenor — while  it  is  a  measure  tending  to  public  informa- 
tion and  security,  it  can  be  liable  to  no  reasonable  objection  on  the  part  of 
the  creditors. 


192  "REPORTS  OF  THE  ["1795. 

The  Secretary  of  the  Treasury  has  reserved  for  the  conclusion  of  this 
yeport,  a  proposition  which  appears  to  him  of  great  importance  to  the  public 
credit,  and  which,  after  some  preliminary  observations,  will  be  offered  to 
consideration.  It  relates  to  the  right  of  taxing  the  public  funds,  and  to  that 
of  sequestering  them  in  time  of  war.  • 

A  proposition  on  either  of  those  points  would  have  been  deemed  super- 
fluous, had  there  never  been  discussions  asserting  a  right  to  do  the  one  and 
the  other,  and  even  the  expediency  of  exercising  that  right.  The  negative 
of  both  the  pretensions,  from  the  habit  of  regarding  it  as  incapable  of  being 
disputed,  had  acquired,  in  the  mind  of  the  Secretary,  so  much  the  force  of 
an  axiom,  as  to  have  precluded  even  the  mention  of  the  subject  in  the  plaa 
which  he  originally  submitted,  for  funding  the  public  debt.  He  should  other- 
wise Jiave  thought  it  an  indispensable  duty  to  suggest,  as  a  matter  of  primary 
consequence  to  the  system  of  credit  contemplated  in  the  plan,  the  express 
renunciation  of  those  pretensions:  for  they  are  (as  he  believes)  not  only 
unwarranted  by  principle  or  usage,  but  subversive  of  the  sound  maxims  of 
public  credit.  A  persuasion  that  this  would  always  be  a  truth  granted  in 
the  councils  of  the  United  States,  is  his  apology  for  the  omission. 

Even  now,  he  should  think  it  useless  to  depart  from  his  silence  on  the 
point,  had  not  the  discussions  alluded  to,  created  some  alarm  in  places  where 
all  the  circumstances  are  not  well  understood,  which  it  is  the  interest  of  the 
country  to  dispel.  The  confidence  justly  to  be  reposed  in  the  collective  wis- 
dom of  this  government,  forbids  the  supposition,  by  one  acquainted  witk 
its  constitution,  that  the  security  of  the  creditor  can  need,  in  this  particular, 
a  further  sanction.  It  is  presumed  to  be  impossible,  that  any  final  act  can 
ever  give  so  deep  a  wound  to  the  national  interest  and  character,  as  to  dero- 
gate from  a  principle  which  may  be  placed  among  the  most  sacred  in  the 
administration  of  a  government.  • 

Is  there  a  right  in  the  government  to  tax  its  own  funds? 

The  pretence  of  this  right  is  deduced  from  the  general  right  of  the  legis- 
lative power  to  make  all  the  property  of  the  State  contributory  to  its  exi- 
gencies. 

But  this  right  is  obviously  liable  to  be  restricted,  by  the  engagements  of 
the  government.  It  cannot  be  justly  exercised  in  contravention  of  them. 
They  must  form  an  exception.  It  will  not  be  denied,  that  the  general  right 
in  question,  could,  and  would  be  abridged,  by  an  express  promise  not  to 
tax  the  funds.  This  promise,  indeed,  has  not  been  given  in  terms;  but  it 
has  been  given  in  substance.  When  an  individual  lends  money  to  the  State, 
the  State  stipulates  to  repay  him  the  principal  lent,  with  a  certain  interest,  or 
to  pay  a  certain  interest,  indefinitely,  till  the  principal  is  reimbursed;  or  it 
stipulates  something  equivalent,  in  another  form.  In  our  case,  the  stipula- 
tion is  in  the  second  form. 

To  tax  the  funds,  is  manifestly  either  to  take,  or  to  keep  back,  a  portion 
of  the  principal  or  interest,  stipulated  to   be  paid. 

To  do  this,  on  whatever  pretext,  is  not  to  do  what  is  expressly  promised; 
it  is  not  to  pay  that  precise  principal,  or  that  precise  interest,  which  has 
been  engaged  to  be  paid.  It  is,  therefore,  to  violate  the  promise  given  to 
the  lender. 

But,  is  not  the  stipulation  to  the  lender,  with  a  tacit  reservation  of  the 
general  right  of  the  Legislature  to  raise  contributions  on  the  property  of 
the  State? 


1795.1  SECRETARY  OF  THE  TREASURY.  193 

This  cannot  be  supposed — because  it  involves  two  contradictory  things: 
an  obligation  to  do,  and  a  right  not  to  do.  An  obligation  to  pay  a  certain 
sum,  and  a  right  to  retain  it  in  the  shape  of  a  tax.  It  is  against  the 
rules,  both  of  law  and  reason,  to  admit,  by  implication,  in  the  construction 
of  a  contract,  a  principle  which  goes  in  destruction  of  it. 

The  government,  by  such  a  construction,  would  be  made  to  say  to  the 
lender:  "  I  want  a  sum  of  money,  for  a  national  purpose,  which  all  the  citi- 
zens ought  to  contribute  proportionably,  but  it  will  be  more  convenient  to 
them,  and  to  me,  to  borrow  the  money  of  you.  If  you  will  lend  it,  I  pro- 
mise you  faithfully,  to  allow  you  a  certain  rate  of  interest,  while  I  keep 
the  money,  and  to  reimburse  the  principal  within  a  determinate  period, 
except  so  much  of  the  one  and  the  other,  as  I  may  think  fit  to  withhold,  in 
the  shape  of  a  tax." 

Is  such  a  construction  either  natural  or  rational?  Does  it  not,  in  fact,  nul- 
lify the  promise  by  the  reservation  of  a  right  not  to  perform  it? 

Is  it  to  be  presumed,  without  being  expressed,  that  such  can  be  the  under- 
standing of  a  lender,  when  he  parts  with  his  money  to  a  government? 

The  contrary  is  so  much  the  more  presumable,  that  nothing  short  of  an 
express  reservation  can  support  the  pretension — to  tax  the  fund. 

It  may  be  replied  that  the  creditor  might  be  willing  to  rely  upon  the  equi- 
ty of  the  government,  not  to  abuse  its  right  by  exacting  from  him  excessive 
contributions. 

This,  if  true,  does  not  obviate  the  difficulty  of  supposing  the  co-existence 
of  an  obligation  and  a  right,  destructive  the  one  of  the  other,  in  interpret- 
ing the  sense  of  a  contract,  when  nothing  of  the  kind  is  said. 

It  is  possible  that  a  creditor  might  be  willing  so  to  contract;  yet  it  is  still 
necessary,  in  order  to  determine  that  he  has  done  it,  to  find  some  provisions 
or  expressions  in  the  contract  indicating  the  intention  to  render  what  is 
stipulated  compatible  with  what  is  reserved.  But  it  is  not  probable  that  an 
individual  would  be  willing  to  lend  upon  such  terms.  He  would  justly  ap- 
prehend, that  in  great  emergencies,  a  right,  having  no  limit  but  the  opinion 
of  the  party  possessed  of  the  power,  would  be  abused,  and  that  the  conveni- 
ence of  laying  hold  of  a  fund  already  prepared  and  at  hand,  supported  by  a 
claim  of  right,  would  be  a  temptation  to  abuse,  not  easy  to  be  resisted.  How- 
ever well  disposed  to  contribute,  in  common  with  his  fellow  citizens,  on  all 
the  ordinary  objects  of  property  or  income,  he  would  be  unwilling  to  subject 
himself  to  a  special  burthen  in  the  peculiar  character  of  creditor  of  the  State. 
He  would  prefer  to  employ  his  money  in  other  ways;  even  to  lend  it  to  pri- 
vate persons,  where  it  might  be  more  likely  to  escape  the  hand  of  the  fiscal 
power. 

Let  the  question  be  tried  by  another  analysis. 

Public  Debt  can  scarcely,  in  legal  phrase,  be  defined  either  property  in 
possession  or  in  action.  It  is  evidently  not  the  first,  till  it  is  reduced  to 
possession  by  payment.  To  be  the  second,  would  suppose  a  legal  power  to 
compel  payment  by  suit.  Does  such  a  power  exist?  The  true  definition  of 
public  debt  is  a  property  subsisting  in  the  faith  of  the  government.  Its 
essence  is  promise.  Its  definite  value  depends  upon  the  reliance  that  the 
promise  will  be  definitely  fulfilled.  Can  the  government  rightfully  tax  its 
promises?  Can  it  put  its  faith  under  contribution?  Where  or  what  is  the 
value  of  the  debt,  if  such  a  right  exist? 

Suppose  the  government  to  contract  with  an  individual  to  convey  to  him 
a  hundred  acres  of  land,  upon  the  condition  of  paying  a  hundred  dollars. 
When  he  came  to  pay  the  100  dollars  and  demand  his  title,  could  the  govern- 


194  -  REPORTS  OF  THE  [1795. 

ment  require  of  him  to  pay  fifty  more  as  a  tax  upon  the  land,  before  it  would 
consent  to  give  him  the  title?  Who  would  not  pronounce  this  to  be  a  breach 
of  contract,  a  fraud,  which  nothing  could  disguise? 

This  case  is  parallel  with  that  under  examination;  with  circumstances  that 
fortify  the  right  of  the  lending  creditor. 

The  government  agrees  with  him,  that,  for  one  hundred  dollars,  which  he 
delivers  to  the  government,  it  will  deliver  to  him,  at  the  end  of  each  year, 
six  dollars.  Here  the  six  dollars  to  be  delivered  answer  to  the  land  to  be 
conveyed,  with  this  stronger  ground  of  right,  that  the  consideration  for  Ihem 
has  actually  been  given  and  received.  Yet,  when  the  creditor  comes  to  de- 
mand his  six  dollars,  he  is  told  that  he  cannot  have  them,  except  with  the 
reservation  of  one  dollar  as  a  tax  upon  the  six,  or  that  he  cannot  have  them, 
except  upon  the  condition  of  returning  one  dollar  as  that  tax.  What  is  this 
but  to  say,  that  Iris  title  to  the  money  in  this  case,  as  to  the  land  in  the  other, 
must  depend  upon  his  paying,  or  allowing,  a  further  consideration  for  it, 
not  contemplated  in  the  contract?  Can  there  be  a  doubt  that  this,  also, 
would  be  a  breach  of  contract — a  fraud? 

The  true  rule  of  every  case  of  property,  founded  on  contract  with  the  go- 
vernment, is  this:  It  must  first  be  reduced  into  possession,  and  then  it  will 
become  subject,  in  common  with  other  similar  property,  to  the  right  of  the 
•government  to  raise  contributions  upon  it.  It  may  be  said,  that  the  govern- 
ment may  fulfil  this  principle,  by  paying  the  interest  with  one  hand,  and 
taking  back  the  amount  of  the  tax  with  the  other.  But  to  this  the  answer  is, 
that,  to  comply  truly  with  the  rule,  the  tax  must  be  upon  all  the  money  of 
the  community,  not  upon  the  particular  portion  of  it  which  is  paid  to  the 
public  creditors;  and  it  ought,  besides,  to  be  so  regulated,  as  not  to  include 
a  lien  of  the  tax  upon  the  fund.  The  creditor  should  be  no  otherwise  acted 
upon,  than  as  every  other  possessor  of  money;  and,  consequently,  the  mo- 
ney he  receives  from  the  public,  can  then  only  be  a  fit  subject  of  taxation, 
when  it  is  entirely  separated,  and  thrown,  undistinguished,  into  the  common 
mass.  A  different  practice  would  amount  to  an  evasion  of  the  principle  con- 
tended for,  and  to  oppression.  A  rent,  or  annuity,  liable  before  it  passes, 
or  in  the  act  of  passing,  or  at  the  moment  of  passing  from  one  proprietor  to 
another,  to  a  deduction,  or  drawback,  at  the  pleasure  of  the  party  from  whom 
it  is  to  pass,  is  an  imaginary  thing,  destitute  both  of  shape  and  substance. 

When  a  government  enters  into  contract  with  an  individual,  it  deposes  as 
to  the  matter  of  the  contract,  its  constitutional  authority,  and  exchanges  the 
character  of  legislator  for  that  of  a  moral  agent,  with  the  same  rights  and 
obligations  as  an  individual.  Its  promises  may  be  justly  considered  as  ex- 
cepted out  of  its  power  to  legislate,  unless  in  aid  of  them.  It  is,  in  theory, 
impossible  to  reconcile  the  two  ideas  of  a  promise  which  obliges  with  a 
power  to  make  a  law  ivhich  can  vary  the  effect  of  it.  This  is  the  great 
principle  that  governs  the  question,  and  abridges  the  general  right  of  the  go- 
vernment to  lay  taxes,  excepting  out  of  it  a  species  of  property  which  sub- 
sists only  in  its  promise. 

There  are  persons  who,  admitting  the  general  rule,  conceive  a  distinction 
to  exist  between  a  tax  upon  the  funds,  which  must  be  paid  at  all  events,  and 
a  tax  upon  alienations  of  them,  which  will  only  be  paid  when  they  are  trans- 
ferred from  one  to  another.  The  latter  they  think  justifiable,  because  it  is 
in  the  option  of  the  creditor  to  avoid  the  tax,  by  avoiding  the  alienation.  But 
the  difference  between  the  two  cases  is  only  a  difference  in  the  degree  of  vi- 
olation. 


1795.]  SECRETARY  OF  THE  TREASURY  195 

The  stock,  in  its  creation,  is  made  transferable.  This  quality  constitutes 
a  material  part  of  its  value,  and  the  existence  of  it  is  a  part  of  the  contract 
with  the  government,  which  has  undertaken,  itself,  to  conduct  the  operation 
of  transferring  by  its  own  officers,  and  consequently  at  its  own  expense.  It 
is  as  completely  a  breach  of  contract  to  derogate  from  this  quality,  in  dimi- 
nution of  the  value  of  stock,  by  encumbering  the  transfer  with  a  charge  or 
tax,  as  it  is  to  take  back,  in  the  same  shape,  a  portion  of  the  principal  or  in- 
terest. It  is  obvious,  too,  that  this  may  be  carried  so  far  as  essentially  to 
destroy  the  transferable  capacity.  But  what  is  a  tax  upon  transfers,  other 
than  the  faculty  of  taking  away  from  the  actual  proprietor  of  stock  a  portion 
of  his  principal,  whenever  his  interests  or  his  necessities  demand  a  transfer, 
in  derogation  from  the  full  enjoyment  of  the  right  to  transfer,  and  from  the 
express  promise  of  the  government  to  pay  to  him  or  his  alienee?  For  it  is 
upon  the  seller,  not  upon  the  buyer,  that  such  a  tax  will  fall.  And  where  is 
the  substantial  difference,  on  the  ground  of  contract,  between  this  and  a  di- 
rect tax  upon  the  fund  itself  ?  The  value  of  it  is  as  certainly  impaired  by 
the  one  as  by  the  other. 

But  shall  the  proprietor  of  money  in  the  funds,  then,  be  exempt  from  his 
proportion  of  the  burthens  which  other  citizens  bear? 

This  will  not  be  the  consequence  of  the  principle.  As  a  consumer,  of 
which  his  income  is  the  instrument,  he  will  pay  his  proportion  of  the  taxes 
on  consumption.  As  a  holder  of  any  other  species  of  property  procured  by 
that  income,  or  otherwise,  which  is  liable  to  a  tax,  he  must  also  contribute 
his  proportion. 

But,  without  undue  refinement,  the  lender  of  money  to  the  public  may  be 
affirmed  to  have  paid  his  tax  when  he  lends  his  money. 

Relying  upon  the  engagement  of  the  government,  express  or  implied, 
that  he  will  receive  what  is  promised  him,  without  defalcation,  he  is  con- 
tent with  a  less  interest  than  he  would  take  if  subject  to  any  such  defalcation, 
and  especially  if  it  was  to  be  arbitrary  as  to  its  extent.  In  this  lower  rate  of 
interest  he  may  be  truly  said  to  pay  his  tax,  or  to  purchase  an  exemption 
from  it. 

Here,  also,  we  find  what  is  decisive  on  the  point  of  expediency. 

If  the  government  had  a  right  to  tax  its  funds,  the  exercise  of  that  right 
would  cost  much  more  than  it  was  worth.  The  money  lender  would  exact 
exorbitant  premiums,  not  only  as  an  indemnification  for  the  use  which  the 
government  might  probably  make  of  its  right,  and  which,  in  practice,  would 
be  likely  to  be  qualified  by  some  regard  to  equality  of  contribution,  but  as 
an  equivalent  for  insurance  against  the  risk  or  possibility  of  a  more  extensive 
use.  Hence  the  government  would  be  likely  to  pay  much  more  in  premiums 
upon  its  loans,  than  it  would  draw  back  in  taxes;  and  the  former  being  sup- 
posed but  equal  to  the  latter,  there  would  be  no  advantage  in  exercising  the 
right. 

But  it  will  be,  perhaps,  more  safe  to  affirm,  that  there  would  be  no  bor- 
rowing at  all  upon  such  terms.  The  first  precedent  of  a  tax  upon  the  funds 
might  be  expected  to  compel  the  government  to  an  express  renunciation  of 
the  right  in  every  future  loan.  Solid  capitalists  would  not  be  much  inclined 
to  adventure  their  money  upon  so  precarious  a  footing  as  is  implied  in  a  power 
of  taxing  their  credits. 

These  reflections  lead  readily  to  an  estimate  of  the  impressions  which 
would  be  produced  by  the  example  of  an  imposition  on  the  funds.  Regarded 
either  as  a  positive  breach  of  contract,  or  as  a  deviation  from  the  sound  max- 
26 


196  REPORTS  OF  THE  [1T95. 

ims  of  credit,  the  effect  upon  it  would  be  nearly  equally  fatal.  Whatever 
might  be  excused  to  a  time  of  revolution,  to  a  defect  of  means,  or  to  some 
extraordinary  peculiarity  of  situation,  no  excuse  would  be  admitted  for  a  de- 
liberate departure  from  principles — at  a  time,  too,  of  national  prosperity,  in 
a  flourishing  state  of  the  finances — after  the  foundations  of  a  regular  system 
had  been  laid.  The  departure  would  argue  an  incorrectness,  an  instability, 
or  a  depravity  of  views,  calculated  to  give  a  lasting  shock  to  public  credit. 
The  United  States  must  henceforth  tread  with  the  most  cautious  steps. 
A  renunciation  of  the  right,  in  future,  might  not  speedily  heal  the  wound 
which  an  example  of  its  exercise  had  given.  Durable  suspicions  might 
fasten  on  the  wisdom  or  the  integrity  of  the  government,  whieh  might  oc- 
casion to  it  no  inconsiderable  loss  and  embarrassment,  before  a  course  of  con- 
trary experiencejwould  obliterate  them. 

The  right  of  a  government  to  sequester  or  confiscate  property,  in  its 
funds,  in  time  of  war,  involves  considerations,  analogous  to  those  whieh  re- 
gard the  right  of  taxing  them.  Whether  the  foreigner  be,  himself,  the 
original  lender,  or  the  proprietor  of  stock,  in  its  constitution  transferable 
without  discrimination,  he  stands  upon  equal  ground  with  the  citizen.  He 
has  an  equal  claim  upon  the  faith  of  the  government. 

In  the  second  case: — as  the  substitute  of  the  original  lender,  the  promise 
made  attaches  immediately  upon  him.  Indeed,  the  certificates  which  issue 
upon  every  transfer,  and  which  may  be  called  the  public  bonds,  designate 
him  as  the  creditor,  and  expressly  invest  him  with  the  correspondent  rights. 
To  sequester  or  confiscate  the  stock,  is  as  effectually  a  breach  of  the  con- 
tract to  pay,  as  to  absorb  it  by  a  tax.  It  is  to  annihilate  the  promise,  under 
the  sanction  of  which  the  foreigner  became  a  proprietor. 

But,-  does  not  the  general  right  of  war,  to  seize  and  confiscate  enemy 
property,  extend  to  the  property  of  the  citizens  of  one  nation  in  the  funds 
of  another — the  two  nations  being  at  war  with  each  other? 

Resorting  to  principle  as  the  guide,  this  question  may,  on  solid  grounds7 
%e  answered  in  the  negative. 

The  right  to  seize  and  confiscate  individual  property,  in  national  wars, 
excludes  all  those  cases  where  the  individual  derives  his  title  from  the  enemy 
sovereign  or  nation;  for  the  right  to  property  always  implies  the  right 
to  be  protected  and  secured  in  the  enjoyment  of  that  property:  and  a  nation, 
by  the  very  act  of  permitting  the  citizen  of  a  foreign  country  to  acquire 
property  within  its  territory,  whether  to  lands,  funds,  or  to  any  other  thing, 
tacitly  engages  to  give  protection  and  security  to  that  property,  and  to  allow 
him  as  full  enjoyment  of  it  as  any  other  proprietor:  an  engagement  which 
no  state  of  things  between  the  two  nations  can  justly  or  reasonably  affect. 
Though  politically  right,  that,  in  wars  between  nations,  the  property  of  pri- 
vate persons,  which  depend  on  the  laws  of  their  own  country,  or  on  cir- 
cumstances foreign  to  the  nation  ivith  which  their  own  is  at  war,  should 
be  subject  to  seizure  and  confiscation  by  the  enemy  nation;  yet  it  is  both 
politically  and  morally  wrong,  that  this  should  extend  to  property  acquired 
under  the  faith  of  the  government,  and  the  laws  of  that  enemy  nation. 

When  the  government  enters  into  a  contract  with  the  citizen  of  a  foreign 
country,  it  considers  him  as  an  individual  in  a  state  of  nature,  and  con- 
tracts with  him  as  such.  It  does  not  contract  with  him  as  the  member  of 
another  society. 

The  contracts,  therefore,  with  him,  cannot  be  affected  by  his  political  rela- 
tions to  that  society.     War,  whatever  right  it  may  give  over  his  other  prop- 


1795.]  SECRETARY  OF  THE  TREASURY.  197 

erty,  can  give  none  over  that  which  he  derives  from  those  contracts.  The 
character  in  which  they  are  made  with  him,  the  faith  pledged  to  him  person- 
ally, virtually  exempt  it. 

This  principle,  which  seems  critically  correct,  would  exempt  as  well  the 
income  as  the  capital  of  the  property.  It  protects  the  use  as  effectually  as 
the  thing.  What,  in  fact,  is  property  but  a  fiction,  without  the  beneficial  use 
of  it?  In  many  cases,  indeed,  the  income  or  annuity  is  the  property  itself. 
And  though  general  usage  may  control  the  principle,  it  can  only  be  as  far  as 
the  usage  clearly  goes.     It  must  not  be  extended  by  analogy. 

Some  of  the  most  approved  publicists,  admitting  the  principle,  qualify  it 
with  regard  to  the  income  of  lands,  which  they  say  may  be  sequestered  "  to 
hinder  the  remittance  of  it  to  the  enemy's  country." 

But  the  same  authority  affirms,  that  a  state  at  war  "does  not  so  much  as 
touch  the  sums  which  it  owes  to  the  enemy.  Every  ivhere,  in  case  of  a  war, 
funds  credited  to  the  public  are  exempt  from  confiscation  and  seizure." 
These  expressions  clearly  exclude  sequestration  as  well  as  confiscation. 

The  former,  no  less  than  the  latter,  would  be  inconsistent  with  the  declara- 
tions that  a  state  at  war  does  not  so  much  as  touch  the  sums  which  it  owes 
to  the  enemy,  and  that  funds  credited  to  the  public  are  exempt  from  seizure. 
And,  on  full  inquiry,  it  is  believed  that  the  suggestion  thus  understood  is 
founded  in  fact. 

Usage,  then,  however  it  may  deviate  in  other  particulars  in  respect  to  pub- 
lic funds,  concurs  with  principle  in  pronouncing,  that  they  cannot  rightful- 
ly be  sequestered  in  time  of  war. 

The  usages  of  war  still  favor  too  much  of  the  ferocious  maxims  of  the 
times  when  war  was  the  chief  occupation  of  man.  Enlightened  reason 
would  never  have  pronounced  that  the  persons  or  property  of  foreigners, 
found  in  a  country  at  the  breaking  out  of  a  war  between  that  country  and 
his  own,  were  liable  to  any  of  the  rigors  which  a  state  of  war  authorizes 
against  the  persons  and  goods  of  an  enemy.  It  would  have  decreed  to  them 
an  inviolable  sanctuary  in  the  faith  of  those  permissions  and  those  laws,  by 
which  themselves  and  their  property  had  come  under  the  jurisdiction 
where  they  were  found.  It  would  have  rejected  the  treachery  of  convert- 
ing the  indulgences,  and  even  rights  of  a  previous  state  of  amity,  into  snares 
for  innocent  individuals. 

Happily,  however,  the  practice  of  latter  times  has  left  several  of  those 
maxims  little  more  than  points  of  obsolete  doctrine.  They  still  retain  their 
rank  in  theory;  but  usage  has  introduced  so  many  qualifications,  as  nearly  to 
destroy  their  operation. 

This  appears  from  the  acknowledgment  of  writers,  from  the  barrenness  of 
modern  history  in  examples  of  the  application  of  those  doctrines,  from  the 
opinions  known  to  be  generally  current  in  Europe,  and  from  a  variety  of  ar- 
ticles which  are  constant  formulas  in  the  treaties  of  the  present  century. 

The  United  States  are  every  way  interested  in  the  mitigation  of  the  rigor 
of  the  ancient  maxims  of  war.  They  cannot  better  demonstrate  their  wis- 
dom, than  by  their  moderation  in  this  respect.  Particularly  interested  in 
maintaining  in  their  greatest  purity  and  energy,  the  principles  of  credit,  they 
cannot  too  strictly  adhere  to  all  the  relaxations  of  those  maxims  which  favor 
the  rights  of  creditors.  No  temporary  advantage  can  compensate  fox  the 
evils  of  a  different  course  of  conduct. 

Credit,  public  and  private,  is  of  the  greatest  consequence  to  every  country. 
Of  this  it  might  be  emphatically  called  the  invigorating  principle.     No  well 


198  REPORTS  OF  THE  [1795, 

informed  man  can  cast  a  retrospective  eye  over  the  progress  of  the  United 
States,  from  their  infancy  to  the  present  period,  without  being  convinced 
that  they  owe,  in  a  great  degree,  to  the  fostering  influence  of  credit,  their 
present  mature  growth.  This  credit  has  been  of  a  mixed  nature,  mercantile 
and  public,  foreign  and  domestic.  Credit  abroad  was  the  trunk  of  our  mer- 
cantile credit,  from  which  issued  ramifications  that  nourished  all  the  parts  of 
domestic  labor  and  industry.  The  bills  of  credit  emitted  from  time  to  time 
by  the  different  local  governments,  which  passed  current  as  money,  co-ope- 
rated with  that  resource.  Their  united  force,  quickening  the  energies  and 
bringing  into  action  the  capacities  for  improvement  of  a  new  country,  was 
highly  instrumental  in  accelerating  its  growth. 

Credit,  too,  animated  and  supported  by  the  general  zeal,  had  a  great  share 
in  accomplishing^  without  such  violent  expedients,  as,  generating  universal 
distress,  would  have  endangered  the  issue,  that  Revolution  of  which  we  are 
so  justly  proud,  and  to  which  we  are  so  greatly  indebted. 

Credit,  likewise,  may  no  doubt  claim  a  principal  agency  in  that  increase 
of  national  and  individual  welfare  since  the  establishment  of  the  present  go- 
vernment, which  is  so  generally  felt  and  acknowledged,  though  the  true 
causes  of  it  are  not  as  generally  understood.  It  is  the  constant  auxiliary  of 
almost  every  public  operation;  has  been  an  indispensable  one  in  those  mea- 
sures by  which  our  frontiers  have  been  defended;  and  it  would  not  be  diffi- 
cult to  demonstrate,  that,  in  a  recent  and  delicate  instance,  it  has  materially 
contributed  to  the  safety  of  the  State. 

There  can  be  no  time,  no  state  of  things,  in  which  credit  is  not  essential  to 
a  nation,  especially  as  long  as  nations  in  general  continue  to  use  it  as  a 
resource  in  war.  It  is  impossible  for  a  country  to  contend  on  equal  terms, 
or  to  be  secure  against  the  enterprises  of  other  nations,  without  being  able 
equally  with  them  to  avail  itself  of  this  important  resource:  and  to  a  young 
country,  with  moderate  pecuniary  capital,  and  not  a  very  various  industry,  it 
is  still  more  necessary  than  to  countries  more  advanced  in  both.  A  truth  not 
less  weighty  for  being  obvious  and  frequently  noticed. 

Public  credit  has  been  well  defined  to  be,  "  a  faculty  to  borrow  at  plea- 
sure considerable  sums  on  moderate  terms;  the  art  of  distributing  over  a 
yuccession  of  years  the  extraordinary  efforts  found  indispensable  in  one;  a 
mean  of  accelerating  the  prompt  employment  of  all  the  abilities  of  a  nation, 
and  even  of  disposing  of  a  part  of  the  overplus  of  others. " 

This  just  and  ingenious  definition,  condenses  to  a  point  the  principal  argu- 
ments in  favor  of  public  credit,  and  displays  its  immense  importance. 

Let  any  man  consult  the  actual  course  of  our  pecuniary  operations,  and 
let  him  then  say  whether  credit  be  not  eminently  useful.  Let  him  imagine 
the  expense  of  a  single  campaign  in  a  war  with  a  great  European  power;  and 
let  him  then  pronounce  whether  credit  would  not  be  indispensable.  Let  him 
decide  whether  it  would  be  practicable  at  all  to  raise  the  necessary  sum  by 
taxes  within  the  year,  and  let  him  judge  what  would  be  the  degree  of  dis- 
tress and  oppression,  which  the  attempt  would  occasion  to  the  community. 
He  cannot  but  conclude  that  war  without  credit  would  be  more  than  a  great 
calamity —would  be  ruin. 

But  credit  is  not  only  one  of  the  main  pillars  of  the  public  safety,  it  is 
among  the  principal  engines  of  useful  enterprise  and  internal  improvement. 
As  a  substitute  for  capital,  it  is  little  less  useful  than  gold  or  silver,  in  agrU 
culture?  in  commerce,  in  the  manufacturing  and  mechanic  arts. 


1795.]  SECRETARY  OF  THE  TREASURY.  I99 

The  proof  of  this  needs  no  labored  deduction.  It  is  matter  of  daily  expe- 
rience in  the  most  familiar  pursuits.  One  man  wishes  to  take  up  and  culti- 
vate a  piece  of  land;  he  purchases  upon  credit,  arid,  in  time,  pays  the  pur- 
chase money  out  of  the  produce  of  the  soil  improved  by  his  labor.  Another 
sets  up  in  trade;  in  the  credit  founded  upon  a  fair  character,  he  seeks  and  of- 
ten finds  the  means  of  becoming  at  length  a  wealthy  merchant.  A  third 
commences  business  as  a  manufacturer  or  mechanic,  with  skill,  but  without 
money.  It  is  by  credit  that  he  is  enabled  to  procure  the  tools,  the  materials, 
and  even  the  subsistence  of  which  he  stands  in  need,  until  his  industry  has 
supplied  him  with  capital,  and  even  then  he  derives  from  an  established  and 
increased  credit  the  means  of  extending  his  undertakings. 

Among  the  circumstances  which  recommend  credit,  and  indicate  its  im- 
portance in  the  whole  system  of  internal  exertion  and  amelioration,  it  is  im- 
possible to  pass  unnoticed  its  unquestionable  tendency  to  moderate  the  rate 
of  interest — a  circumstance  of  infinite  value  in  all  the  operations  of  labor  and 
industry. 

If  the  individual  capital  of  this  country  has  become  more  adequate  to  its 
exigencies  than  formerly,  it  is  because  individuals  have  found  new  resources 
in  the  public  credit,  in  the  funds  to  which  that  has  given  value  and  activity. 
Let  public  credit  be  prostrated,  and  the  deficiency  will  be  greater  than  be- 
fore. Public  and  private  credit  are  closely  allied,  if  not  inseparable.  There 
is  perhaps  no  example  of  the  one  being  in  a  flourishing,  where  the  other  was 
in  a  bad  state.  A  shock  to  public  credit,  would,  therefore,  not  only  take 
away  the  additional  means  which  it  has  furnished,  but,  by  the  derangements, 
disorders,  distrusts,  and  false  principles,  which  it  would  engender  and  dis- 
seminate, would  diminish  the  antecedent  resources  of  private  credit. 

The  United  States  possess  an  immense  mass  of  improveable  matter:  the 
developement  of  it,  continually  making,  may  be  said  to  enlarge  the  field  ot 
improvement  as  it  progresses;  and  though  the  active  capital  of  the  country 
has,  no  doubt,  considerably  increased,  it  is  probable  that  it  does  not  bear  at 
present  a  much  greater  proportion  to  the  objects  of  employment  than  it  has 
done  at  any  former  period.  Credit,  upon  this  hypothesis,  of  every  kind, 
is  nearly  as  necessary  to  us  now  as  it  ever  was.  But  at  least  it  may  be  af- 
firmed, with  absolute  certainty,  that  to  a  country  so  situated,  credit  is  pecu- 
liarly useful  and  important. 

If  the  United  States  observe  with  delicate  caution  the  maxims  of  credit, 
as  well  towards  foreigners  as  their  own  citizens,  in  connexion  with  the  gene- 
ral principles  of  an  upright,  stable,  and  systematic  administration,  the  strong 
attractions  which  they  present  to  foreign  capital,  will  be  likely  to  ensure 
them  the  command  of  as  much  as  they  may  want,  in  addition  to  their  own, 
for  every  species  of  internal  amelioration. 

Can  it  be  doubted,  that  they  would  derive  from  this,  in  a  course  of  time, 
advantages  incomparably  greater  than  any,  however  tempting,  that  could 
partially  result  from  a  disregard  of  those  maxims,  or  from  the  exercise  of  a 
questionable  right,  which  should  even  appear  to  derogate  from  them? 

Credit  is  an  entire  thing:  every  part  of  it  has  the  nicest  sympathy  with 
every  other  part:  wound  one  limb,  and  thp,  ■»  hole  tree  shrinks  and  decays. 

The  security  of  each  creditor  is  inseparable  from  the  security  of  all  cred- 
itors. The  boundary  between  foreigner  and  citizen,  would  not  be  deemed  a 
sufficient  barrier  against  extending  the  precedent  of  an  invasion  of  the  rights 
of  the  former  to  the  latter.  The  most  judicious  and  cautious  would  be  most 
apt  to  reason  thus,  and  would  only  look  for  stronger  shades  of  apparent  ne- 


2Q0  REPORTS  OF  THE  [1795. 

cessity  or  expediency  to  govern  the  extension.  And,  in  affairs  of  credit,  the 
opinion  of  the  judicious  and  cautious  may  be  expected  to  prevail.  Hence 
the  government,  by  sequestering  the  property  of  foreign  citizens  in  the  pub- 
lic funds  at  the  commencement  of  a  war,  would  impair,  at  least,  if  not  destroy 
that  credit  which  is  the  best  resource  in  war. 

It  is  in  vain  to  attempt  to  disparage  credit,  by  objecting  to  it  its  abuses. 
What  is  there  not  liable  to  abuse  or  misuse?  The  precious  metals,  those 
great  springs  of  labor  and  industry,  are  also  the  ministers  of  extravagance, 
luxury,  and  corruption.  Commerce,  the  nurse  of  agriculture  and  manufac- 
tures, if  overdriven,  leads  to  bankruptcy  and  distress.  A  fertile  soil,  the 
principal  source  of  human  comfort,  not  unfrequently  begets  indolence  and 
effeminacy.  Even  liberty  itself,  degenerating  into  licentiousness,  produces 
a  frightful  complication  of  ills,  and  works  its  own  destruction. 

It  is  wisdom,  In  every  case,  to  cherish  whatever  is  useful,  and  guard  against 
its  abuse.  It  will  be  the  truest  policy  of  the  United  States,  to  give  all  pos- 
sible energy  to  public  credit,  by  a  firm  adherence  to  its  strictest  maxims;  and 
yet  to  avoid  the  ills  of  an  excessive  employment  of  it,  by  true  economy 
and  system  in  the  public  expenditures,  by  steadily  cultivating  peace,  and  by 
using  sincere,  efficient,  and  persevering  endeavors  to  diminish  present  debts, 
prevent  the  accumulation  of  new,  and  secure  the  discharge,  within  a  reasona- 
ble period,  of  such  as  it  may  be  at  any  time  matter  of  necessity  to  contract. 
It  will  be  wise  to  cultivate  and  foster  private  credit,  by  an  exemplary  obser- 
vance of  the  principles  of  public  credit,  and  to  guard  against  the  misuse  of 
the  former,  by  a  speedy  and  vigorous  administration  of  justice,  and  by  taking 
away  every  temptation  to  run  in  debt,  founded  in  the  hope  of  evading  the 
just  claims  of  creditors. 

As  an  honorable  evidence  of  this  disposition,  and  with  a  view  to  quiet 
the  alarms  which  have  been  excited,  and  to  silence  for  ever  a  question  which 
can  never  be  agitated  without  serious  inconvenience,  the  Secretary  of  the 
Treasury,  in  the  last  place,  respectfully  submits: 

That  there  be  an  express  renunciation,  by  law,  of  all  pretension  of  right 
to  tax  the  public  funds,  or  to  sequester,  at  any  time,  or  on  any  pretext,  the 
property  which  foreign  citizens  may  hold  therein. 

This  will  be  particularly  essential  to  the  success  of  the  plan  for  converting 
the  foreign  into  domestic  debt;  as  the  present  contracts  for  the  Amsterdam 
and  Antwerp  debt  contain  an  equivalent  stipulation,  and  there  is  no  prospect 
that  the  creditors  would  consent  to  a  change,  but  upon  the  condition  of  a 
like  stipulation. 

In  the  commencement  of  this  report  it  was  the  intention  to  submit  some 
propositions  for  the  improvement  of  the  several  branches  of  the  public  re-? 
venue,  but  it  is  ileemed  adviseable  to  reserve  this  part  of  the  subject  for  a  fu 
lure  communication. 

All  which  is  respectfully  submitted. 

ALEXANDER  HAMILTON, 

Secretary  of  the  Treasury, 


1795.] 


SECRETARY  OF  THE  TREASURY 


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Livres. 
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2,000,000 
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By  four  instalments,  of  1,500,000  livres  each,  on  the 
loan  of  18,000,000,  which  will  be  due  on  the  2d 
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1798,  bearing  interest  from  September  3d,  1794, 
at  5  per  cent,  per  aranum                ... 

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"loan  of  10,000,000,  winch  will  be  due  on  die  4th 
of  November,  in  the  years  1795  and  1796,  bear- 
ing interest  from  the  4th  of  November,  1794,  at  4 
percent,  per  annum          -             -                      ■     - 

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interest  from  January  1,  1795,  at  5  percent,  per 
annum        ...... 

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12,188,040 

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3" 

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1795,  arising  from  payments  exceeding  the  interest 
and  instalments  demandable  by  France  to  that  pe- 
riod              ----.. 

Balance  due  to  the  French  government  on  1st  Janua- 
ry, 1795,  exclusive  of  interest  on  loans,  per  credit  - 

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1795.]  SECRETARY  OF  THE  TREASURY  $11 

E. 

View  of  Sinking  Fund,  according  to  plan  proposed  in  the  Report. 

Present  annual  amount  of  Sinking  Fund,  supposing  the  investment  of  the  re- 
sidue of  the  surplus  of  revenue  to  the  end  of  1790,  and  of  the  arrears  of 
interest  on  the  debt  to  foreign  officers,  in  the  purchase  of  six  per  cent, 
stock,  at  par,  and  exonerating  the  fund  from  the  charge  to  which  it  is 
subject  by  the  last  section  of  the  act  making  provision  for  the  reduction  of 
the  public  debt,  viz: 

Interest  for  a  year  on  stock  actually  purchased  and  redeemed,  to  the  last  of 
December,  1794,  and  carried  to  the  credit  of  the  fund  $  6S,225  55 

Interest  for  a  year  on  the  principal  and  arrears  of  interest,  to 

the  end  of  1790,  on  the  debt  to  foreign  officers  -  11,892  44 

Interest  for  a  year  on  subsequent  arrears  of  interest,   not  in- 
cluded in  the  above       -----  1,547  05 

Interest  for  a  year  on  $411,659  49,  being  the  unexpended 

balance  of  surplus  to  the  end  of  1790     -  24,699  56 


$106,364  60 


Interest  for  a  year  on  the  Loan  Office  certificates,  bearing  inte- 
rest on  the  nominal  principal  which  (those  certificates  being 
paid  off  as  proposed,)  would  accrue  to  this  fund  -  1,911  00 

Add  this  sum,  to  be  appropriated  out  of  the  revenue  from  im- 
ports and  tonnage,  for  the  redemption  of  stock  bearing  a 
present  interest  of  six  per  cent,  according  to  the  5th  propo- 
sition in  the  Report       -----  408,13^  64 


The  amount  of  two  per  cent,  on  $25, 820,512  20,  being  the 
amount  of  stock  unredeemed,  bearing  a  present  interest  of 
6  per  cent,  exclusive  of  State  balances  -  -        $516,410  24 


Dividends  on  bank  stock,  deducting  interest  on  such  instalments   of  the 
loan  of  the  bank  as  had  not  accrued  in  the  year  1794      -         $  62,500  00 

Sum  to  be  paid  in  addition  thereto,  on  the  1st  of  January, 
1796,  out  of  the  revenue  from  imports  and  tonnage,  for  re- 
imbursement of  the  4th  instalment  of  the  above  loan  137,500  00 


Amount  of  annual  instalments  of  $2,000,000,  had  of  the  Bank 
of  the  United  States,  pursuant  to  the  11th  section  of  the  act 
of  incorporation  -----        $200,000  00 


The  surplus  of  the  dividends  on  bank  stock  will  increase  each  year  $12,000; 
the  interest,  liberated  by  payment  of  each  annual  instalment  of  principal,  and 
the  sum  to  be  paid  out  of  the  revenue,  will  annually  decrease  in  the  same 
ratio. 

It  will  be,  after  the  first  year — 

On  the  1st  of  January,  1797,         *  $  125,500 
On  the  1st  of  January,  1798,  113,500 

On  the  1st  of  January,  1799,  101,500 

On  the  1st  of  January,  1S00,  S9,50» 

28 


212  REPORTS  OF  THE  [1795. 

On  the  1st  of  January,  1801,  77,500 

On  the  1st  of  January,  1802,  65,500. 

The  yearly  average  of  the  sums  successively  payable  out  of 
the  revenue  from  imports  and  tonnage,  towards  reimbursing 
the  two  million  loan,  will  be  -  -  -  $101,500 

And  the  whole  loan  being  discharged  on  the  1st  of  January, 
1803,  the  annual  dividend  on  bank  stock  will  be  liberated 
from  the  future  payment  of  interest  on  the  loan,  and  will 
thenceforth  yield  to  the  sinking  fund  an  annuity  liable  to 
the  redemption  of  the  deferred  stock       -  $152,500 

Two  per  centum  of  g>12,473,S37  93,  the  amount  of  unre- 
deemed stock  which,  on  the  1st  of  January,  1801,  will  bear 
interest  at  6j)er  centum  per  annum,  exclusive  of  state  ba- 
lances, and  which  will  be  payable  on  the  Istof  January, 
1802,  is         -  -  -  "  -  -  -  $249,576  75 

Yearly  interest,  which,  on  the  1st  of  January,  1801,  will  be- 
gin to  accrue  to  the  sinking  fund,  in  the  deferred  stock 
standing  to  its  credit,  is  §52,319  97  Further  sum  necessary 
for  payment  of  the  above  two  per  centum         -  -  197,256  78 


$249,576  75 


This  sum  of  $197,256  7S  will,  in  the  year  1802,  1803,  be  pay- 
able out  of  the  revenues  from  imports  and  tonnage.  But 
the  yearly  dividends  on  bank  stock,  free  from  charge  after 
the  1st  of  January,  1803,   being         -  $152,500  00 

The  sum  thenceforth  payable  out  of  the  revenues  from  imports 

and  tonnage,  for  payment  of  said  two  per   centum,  will   be        44,756   78 

Which,  together  with  the  yearly  interest  on  deferred  stock, 

being    -  -  -  -  -  -  52,319  97 


Is  equal  to  the  amount  of  redeeming  annuity  of  deferred  stock, 

being  .._.._         §249,576  75 


Hence  the  permanent  appropriations  out  of  the  revenue  from  imports  and 
tonnage,  for  the  redemption  of  the  whole  of  the  unredeemed  funded  stock, 
which  now  bears,  and  hereafter  will  bear,  an  interest  of  six  per  centum  per 
annum,  exclusive  of  the  stock  standing  to  the  credit  of  certain  States,  pursu- 
ant to  the  report  of  the  Commissioners,  is, 

For  that  bearing  a  present  interest,  -  8  408,134  64 

For  that  bearing  a  future  interest,  -  44,756  78 

Total  annual  extra  appropriation  to  sinking  fund,  out  of  the 

revenues,  exclusive  of  bank  dividends  -  -  $452,891  42 


The  whole  of  the  stock  bearing  a  present  rate  of  interest,  will,  by  this  fund, 
be  redeemed  in  something  less  than  twenty-three  years,  and  the  interest 
then  set  free  (to  wit,)  in  the  year  1818,  will  be  -         %  1,631,259  72 

To  which  add  the  further  appropriation  towards  principal,  as 

above  ------  408,134  64 


$2,039,394  36 


1795.]  SECRETARY  OF  THE  TREASURY.  213 

This  annuity,  applied  to  payments  or  purchases  of  the  foreign  debt,  on  a  cal- 
culation of  5  per  cent,  interest,  would,  by  the  1st  of  January,  1824,  ex- 
tinguish that  debt,  and  yield  a  surplus  of     -  $  122,502  29 

The  whole  of  the  stock  bearing  a  future  interest  of  six  per  cent.,  will,  by 
the  fund  to  be  applied  to  it  as  above,  be  also  redeemed  in  something  less 
than  twenty-three  years  from  the  time  of  commencing  the  redemption, 
that  is,  by  the  year  1824,  and  the  interest  then  set  free  on  that  stock  will 
be  -  -  -  -  -  8801,050  24 

Thesumappropriatedtowardstheredemptionthenalsosetfree, is    197,256  78 

To  which  add  the  sum  liberated  by  the  redemption  of  the  pre- 
sent six  per  cent,  stock         -  2,039,394  36 

And  the  interest  on  $13,745,379  35,  being  the  amount  of  the 

foreign  debt  extinguished  as  above  -  -  638,480  58 


There  will,  therefore,  be  an  annuity  of  -  -  §3,676,181   96 


Thus  will  the  whole  of  the  foreign  debt  be  extinguished  by  the  year  1824, 

and  the  sinking  fund  will  then  possess  an  annuity  of  $3,676,181   96 

And  a  sum,  in  gross,  of  122,502  29 

Together,  S3, 798, 684  25 


Which  in  two  years  would  more  than  pay  off  the  whole  of  the  balances 
to  creditor  States,  and  the  whole  of  the  unfunded  debt,  if  not  sooner  dis- 
charged. 

So  that,  supposing  the  proceeds  of  the  western  lands  to  be  sufficient,  by 
the  same  time,  to  redeem  the  three  per  cent,  stock,  the  whole  of  the  present 
debt  of  the  United  States,  foreign  and  domestic,  funded  and  unfunded,  may 
be  redeemed  by  the  operation  of  the  provision  proposed  by  the  5th  proposi- 
tion, by  the  year  1826;  and  there  would  revert  to  the  United  States  a  yearly 
revenue  of  $4,435,320  89. 

ALEXANDER  HAMILTON. 

Treasury  Department,  January  17,  1795. 

NOTE. — The  calculations  in  this  statement  would  require,  to  assure  their  perfect  accu- 
racy, a  revision;  but  it  is  certain,  that  any  errors  it  may  contain,  will  be  too  inconsiderable  to 
affect  any  important  result. 


214  REPORTS  OF  THE  T1795. 

COMPARATIVE  VIEW  OF  ANNUAL  CURRENT  REVENUE  AND  EXPENDITURE, 


Current  Revenue. 

Permanent  Revenue., 


Nett  duties  on  imports  and  tonnage  as  ap- 
pertained 1793,  per  account  of  receipts 
and  expenditures  for  that  year  -         $  6,087,546  26 

Add  product  of  additional  duties  on  imports 
laid  by  the  acts  of  the  5th  and  7th  of  June, 
1794,  computed~on  the  importations  of 
1793  -  -  -  -   .         1,091,872  32 


Deduct  for  extra  drawbacks,  which  would 
become  payable  after  the  year  1793,  in 
consequence  of  extra  importations  of  cer- 
tain articles  in  that  year,  which  were  re- 
exported       ....  1,500,000  00 

Deduct  amount  of  temporary  duties  on  im- 
ports -  -  -  -  1,479,626  91 


$7,179,418  58 


2,979,626  91 


Permanent  duties  on  imports  and  tonnage         -  -  4,199,791  67 

Duties  on  spirits  distilled  within  the  United 

States,  and  upon  stills  -  -  -  -  400,000  00 

Nett  duties  on  postage  of  letters,  as  ascer- 
tained in  1793      .--;,-  -  -  ~  29,722  16 

Patent  fees  as  they  accrued  in  the  same  year       -  -  660  00 

Dividends  of  bank  stock  beyond  the  inter- 
est payable  to  the  bank  in  1793  38,500  00 

Add  interest  of  two  instalments,  which,  be- 
ing paid  off,  will  increase  the  dividend  24,000  00 

r. 62,500  00 


Total  permanent  revenue  <..'-.--".       $  4,692,673  83 

Temporary  Revenue. 

Duties  on  imports  as  stated  above  -  r  -         $1,479,626  91 

Estimated  product  of  duties  on  snuff  manu- 
factured, and  sugar  refined  within  the 
United  States,  carriages  for  the  convey- 
ance of  persons,  licenses  for  selling  wines 
and  spirits  at  retail  sales  at  auction  7  -  380,000  00 

Total  temporary  revenue  ...  1,859,626  9\ 

Total  annual  current  revenue  5  -  •*  $6,552,300  74 


1795.]  SECRETARY  GF  THE  TREASURY  215 

Current  Expenditure. 

Interest  on  foreign  debt  as  stated  -         $678,102  80 

Deduct  interest  on  instalments  of  foreign 
debt  for  1795,  to  be  paid  out  of  the  pro- 
ceeds of  foreign  loans  -  -  39,622  22 

$    638,480  58 

Interest  on  funded  domestic  debt  -  -  -  2,339,241  50 

Interest  on  unsubscribed  debt,  computed 

according  to  contract  -  -  -  -  66,031  10 

$3,043,753  18 

Interest  on  temporary  loans  for  anticipating 

the  revenue 100,000  00 

Expenses  of  the  Civil  Department,  includ- 
ing foreign  intercourse  -  -  -  -  475,249  53 

Expenses  of  the  Military  Department      -        1,311,975  29 

Including!"  pensions  to  invalids       -  -  85,357  04 

Expenses  of  Naval  Department  for  a  year  -  -  441,508  80 

Expenses  of  Light  House  and  other  estab- 
lishments for  the  benefit  of  navigation  -  24,000  00 

5,481,843  84 

Excess  of  re  venue  beyond  the  expenditure         -  -  -  -  1,070,456  90 

Treasubt  Department,  January  17th,  1795. 


$  6,552,300  74 


ALEXANDER  HAMILTON, 

Secretary  of  the  Treasury. 


RESULT  IN  THE  YEAR  1796,  ACCORDING  TO  FIFTH  PROPOSITION. 

Surplus  of  revenue  brought  forward  -----        $1,070,456  9'0 

Increased  interest  on  foreign  debt  $  67,291  89 

Interest  on  new  emission  ....  4,528  70 

Ten  per  cent,  of  arrears  of  unfunded  inter- 
est, including  indents    -  -  -  -  ,  48,309  53 

/early  instalment  on  account  of  1,000,000 
loan  for  foreign  intercourse  *  200,000  00 

Appropriations  for  Sinking  Fund,  fviz.J 

Dividends  of  bank  stock  -  -  $62,500  00 

Sum  payable  out  of  imports  and  tonnage  for 
redemption  of  6  per  cent,  stock  -  408,134  64 

Sum  payable  on  the  1st  of  January,  1796, 
.towards  reimbursing  of  bank  loan        -  137,500  00 


608,134  64 


928,264  76 


Balance  being  excess  of  revenue  beyond  expenditure     -  -  $142,192  14 

It  appears  by  statement  E,  that  these  extra  appropriations  will,  in  the  progress  of  the 
operation,  be  reduced;  and  that,  including  a  provision  for  the  redemption  of  the  deferred  debt, 
the  permanent  charge  on  the  revenue  (exclusive  of  bank  dividends,)  for  the  sinking  fund, 
will  be  no  more  than  $452,891  42. 

A.  H. 


gjg  REPORTS  OF  THE  [1801, 


REPORT  ON. THE  FINANCES. 

TOR  180L 


]n  obedience  to  the  directions  of  the  act  supplementary  to  the  act,  entitled 
"An  act  to  establish  the  Treasury  Department,"  the  Secretary  of  the  Trea- 
sury respectfully  submits  the  following  report  and  estimates: 

The  permanentrevenues  of  the  United  States,  according  to  the  laws  now 
in  force,  consist  of,  1st,  duties  on  merchandise  and  tonnage;  2d,  internal  du- 
ties on  stills  and  domestic  distilled  spirits,  refined  sugar,  licenses  to  retailers, 
'sales  at  auction,  and  pleasurable  carriages;  3d,  proceeds  of  the  sales  of  public 
lands;  4th,  duties  on  postage;  5th,  dividends  on  shares  in  the  Bank  of  the 
United  States;  6th,  incidental,  arising  from  fees,  fines,  and  penalties,  re- 
payments in  the  Treasury,  and  sales  of  public  property  other  than  lands. 

1.  Duties  on  merchandise  and  tonnage. — The  receipts  in  the  Treasury,, 
arising  from  that  source,  have  amounted,  for  the  year  ending  on  the  30th 
September,  1801,  to  $  10,126,213  .92.  If  to  this  sum  be  added  the  draw- 
backs paid  by  collectors  on  the  exportation  of  domestic  distilled  spirits  and 
refined  sugar,  which  are  a  charge  on  the  internal  revenues;  and  that  part  of 
the  additional  duties,  laid  in  the  year  1800,  which  did  not  operate  during  the 
year,  to  which  those  receipts  refer,  the  sum  which  would  have  been  received 
at  the  present  rate  of  duties,  cannot  be  estimated  at  less  than  $10,500,000. 
The  amount  of  duties  secured  on  the  30th  September  last,  and  falling  due 
in  the  course  of  the  year  1802,  compared  with  that  of  preceding  years,  justifies 
an  opinion  that,  had  the  importations  and  exportations  continued  in  the  same 
proportion,  those  duties  would  have  brought  in  the  Treasury,  during  the 
year  1802,  near  §11,000,000. 

How  far  this  branch  of  revenue  may  be  affected  by  the  restoration  of 
peace  in  Europe,  is  rather  a  subject  of  speculative  conjecture  than  of  calcu- 
lation. That  it  will  be  liable  to  sudden  and  considerable  fluctuations,  cannot 
be  doubted;  and,  for  that  reason,  a  greater  degree  of  correctness  may  be  ob- 
tained, by  forming  an  estimate  for  a  number  of  years,  than  for  any  one 
year.  The  period  for  which  such  an  estimate  should  be  made,  being  arbi- 
trary, so  far  as  relates  to  the  revenue,  that  of  the  eight  years,  1802  to  1809,  is 
selected,  principally  in  reference  to  the  payments  to  be  made  on  account  of 
the  public  debt;  the  whole  of  the  foreign  debt  being  actually  due  within  that 
term  of  years,  and  the  eight  per  cent,  stock  becoming  redeemable  the  last 
year  of  the  period.  The  best  data  on  which  the  estimate  may  be  predicated, 
seem  to  be  the  actual  consumption  of  imported  articles  during  former  years, 
and  the  ratio  of  increase  of  population  as  ascertained  by  the  census. 

With  a  view  to  the  first  object,  the  statements  A  to  H  have  been  abstracted 
from  the  records  in  the  Treasury.  They  exhibit  the  value  or  quantities  of 
imported  articles  on  which  duties  have  been  actually  paid,  for  each  calendar 
year,  from  1790  to  1800,  deducting  from  the  gross  amount  imported,  each 
year,  the  value  or  quantities  of  articles  re-exported  during  the  same  year,. 
which  were  entitled  to  drawback. 


1801.]  SECRETARY  OF  THE  TREASURY.  ^H 

Those  statements  do  not,  however,  show  correctly,  principally  for  the  last 
years,  the  actual  annual  amount  of  consumption;  because,  1st,  exportation,? 
to  a  considerable,  but  not  precisely  ascertained  amount,  have  taken  place  un- 
der such  circumstances  as  did  not  entitle  the  articles  exported  to  a  draw- 
back; and  2d,  the  amount  of  foreign  articles  remaining  on  hand  at  the  close 
of  the  year  1800,  was  much  greater,  in  proportion  to  the  respective  popula- 
tion, tnan  that  on  hand  at  the  commencement  of  the  year  1790.  Those 
cause;-,  which  affect,  to  an  inconsiderable  degree,  the  years  1790  to  1792,  and 
but  piirtially  those  immediately  succeeding,  would,  however,  render  any  de- 
duct: on  drawn  from  those  documents,  in  relation  to  the  years  1799  and  1800, 
altogether  fallacious.  The  preceding  nine  years  may  be  divided  into  two 
distinct  periods;  the  first,  from  the  1st  dayT  of  January,  1790,  to  the  31st  day 
of  Deceniber,  1792,  includes  the  three  years  which  immediately  preceded 
the  European  maritime  war;  the  second  includes  the  six  first  years  of  that 
war,  viz.  from  the  commencement  of  1793  to  the  close  of  1798. 

In  order  to  obtain  a  distinct  view,  for  each  of  those  two  periods,  of  the 
annual  average  consumption  of  foreign  articles,  and  of  the  annual  average 
revenue  which,  at  the  rate  of  the  present  duties,  would  have  accrued  thereon, 
the  table  L  has  been  prepared,  which  shows  that  the  nett  annual  revenue 
which  would,  at  the  present  rate  of  duties,  have  accrued  during  each  of  those 
two  periods,  amount,  on  an  average,  for  the  years  1790  to  1792,  to 
116,163,000;  and  for  the  years  1793  to  179S,  to  $8,350,000.  These  sums 
constitute  not  the  receipts  in  the  Treasury,  but  the  revenue  which  would  have 
accrued  during  the  respective  years  to  which  they  refer.  The  first  may  be 
considered  as  the  revenue  accruing  during  the  year  1791;  the  last,  as  that 
accruing  during  the  year  ending  30th  June,  1796;  and  as,  on  account  of  the 
credit  given  for  the  payment  of  duties,  the  revenue  accruing  during  one 
year  constitutes  nearly  the  receipts  of  the  year  ending  nine  months  later, 
those  two  sums,  and  the  receipts  of  the  year  ending  on  the  30th  Septem- 
ber, 1801,  as  above  stated,  may,  without  material  error,  be  considered  as  the 
receipts  of  three  distinct  years,  four  years  and  a  half  distant  each  from  the 
other,  viz: 

For  the  year  ending  30th  September,  1792,  $  6, 16  3, 000. 

For  the  year  ending  30th  March,  1797,  8,350,000. 

For  the  year  ending  30th  September,  1801,  10,500,000. 

The  ratio  of  increase  during  the  whole  period  of  nine  years,  exceeds  se- 
venty per  cent.,  whilst  that  of  population,  during  the  same  time,  was  hardly 
more  than  thirty  per  cent.  The  ratio  of  increase,  during  the  first  period  of 
four  years  and  a  half,  is  near  35i  per  cent.,  and,  during  the  last,  more  than 
25§  per  cent.,  whilst  that  of  population,  for  each  period,  was  only  at  the  rate 
of  14  per  cent. 

The  greater  ratio  of  increase,  during  the  first,  than  during  the  last  period 
of  four  years  and  a  half,  is  owing  to  the  comparison  in  the  first,  being  between 
a  period  of  European  peace  and  a  period  of  European  war;  and,  in  the  last, 
between  two  periods  of  European  war. 

The  ratio  of  increase  of  population  being  ascertained,  by  the  census,  to  be 
at  the  rate  of  34  per  cent,  for  ten  years;  if  the  increase  of  consumption  shall 
be  supposed  to  be,  hereafter,  precisely  the  same  as  that  of  population,  the 
annual  receipts  of  the  eight  years,  1802  to  1809,  may  be  estimated  as  nearly 
fifty  per  cent,  greater  than  those  of  the  years  1790  to  1792,  or  at  a  sum  of 
near  $9,250,000,  if  that  period  be  assumed  as  the  basis  on  which  to  predi- 
cate the  estimate.       But  if  the  calculation  shall  be  grounded  on  the  revenue 


£18  REPORTS  OF  THE  [1801. 

of  the  years  1793  to  1798,  the  annual  receipts  of  the  years  1802  to  1809, 
should  be  estimated  as  about  30^  per  cent,  greater  than  those  of  that  period, 
or  at  about  glO, 900,000. 

It  seems  that  those  two  respective  sums  may  reasonably  be  considered  as 
the  two  extremes  which  the  average  annual  receipts  of  the  eight  ensuing 
3Tears  will  not  exceed.  The  first  calculation,  of  $9,250,000,  appears  to  be 
below  the  probable  result;  since,  being  predicated  on  the  consumption  of  the 
three  years  preceding  the  European  maritime  war,  without  any  other  addi- 
tion than  that  resulting  from  the  ascertained  increase  of  population,  it  rests 
on  the  supposition  that  the  permanent  wealth  of  the  United  States  has  not, 
during  that  war,  increased  in  any  greater  proportion  than  their  population; 
and  that  the  whole  of  the  external  commerce  acquired  during  the  same  pe- 
riod, must  necessarily  be  lost  by  the  return  of  peace  amongst  foreign  nations. 

Although,  therefore,  it  be  presumable,  that  the  receipts  of  some  of  those 
years  will,  from  temporary  causes,  fall  below  that  sum,  it  is  believed  that, 
taking  the  whole  period  of  eight  years,  the  duties  on  merchandise  and  ton- 
nage may  safely  be  averaged  at  a  sum  not  less  than  9,500,000  dollars. 

As  a  minute  investigation  of  the  several  rates  of  duty,  now  paid  by  the 
several  species  of  foreign  merchandise,  may  perhaps  suggest  some  advan- 
tageous modifications,  a  table  of  those  rates  is  annexed  to  this  Report. 

Without  any  view  to  an  increase  of  revenue,  but  in  order  to  guard,  as  far 
as  possible,  against  the  value  of  goods  being  underrated  in  the  invoices,  it 
would  be  eligible  to  lay  specific  duties  on  all  such  articles,  now  paying  du- 
ties ad  valorem,  as  may  be  susceptible  of  that  alteration.  Amongst  such,  the 
following  have  been  suggested:  Fruits  and  spices,  pickled  and  dried  fish,  oil, 
glue,  several  species  of  drugs,  watches,  gunpowder,  and  segars. 

Legislative  provisions  seem  necessary,  in  order  better  to  define  the  restric- 
tions under  which  the  intercourse  with  the  adjacent  British  and  Spanish 
possessions  shall  be  carried  on,  in  conformity  with  treaties;  under  which 
the  articles  of  the  growth  or  manufacture  of  the  United  States  may  be  im- 
ported, free  of  duty,  by  the  way  of  New  Orleans,  from  the  western  parts  of 
the  Union  to  the  ports  of  the  Atlantic  States,  and  from  these  to  the  inte- 
rior districts  of  collection  on  the  western  waters — and  under  which  draw- 
backs shall  be  allowed  on  the  exportation  of  foreign  articles. 

2.  Permanent  Internal  Duties. — The  annual  statement,  prepared  by 
the  Commissioner  of  the  Revenue,  and  which  will  be  completed  in  a  few 
days,  precludes  the  necessity  of  exhibiting,  here,  all  the  details  pertain- 
ing to  this  branch  of  revenue.  The  statement  M  is  an  abstract  of  its 
amount,  for  the  year  1800;  during  which,  the  duties  on  spirits  and  stills, 
refined  sugars,  licenses  to  retailers,  sales  at  auction,  and  pleasurable  carriages, 
produced  a  nett  sum  of  576, SSS  dollars  and  80  cents.  The  duties  on 
stamps,  which,  as  under  the  existing  laws  they  will  cease  after  the  4th  day  of 
March,  1S03,  are  not  included  amongst  the  permanent  revenues,  amount- 
ed, for  the  same  year,  to  209,S53  dollars  and  32  cents.  Both  together 
constitute  an  item  of  788,742  dollar  Ty^-.  The  receipts  in  the  Treasury 
from  all  the  internal  revenues,  have  amounted,  for  the  year  ending  on  the 
30th  September,  1801,  to  919,719  dollars  and  16  cents.  Deducting  from 
this  sum  65,000  dollars,  being  the  estimated  amount  of  drawbacks  paid  dur- 
ing that  year,  out  of  the  proceeds  of  the  external  revenue,  on  the  exportation 
of  domestic   distilled  spirits  and  refined   sugar,  leaves  a  nett  sum  of  about 


1801.]  SECRETARY  OF  THE  TREASURY.  219 

854,000  dollars,  and  an  increase  of  near  70,000  dollars  beyond  the  revenue 
of  1800. 

The  accounts  of  the  last  nine  months  being  yet  but  partially  rendered* 
it  is  not  practicable  to  as  certain  to  what  class  of  duties  the  increase  belongs, 
nor  particularly  to  discriminate  between  the  increase  of  the  revenue  arising 
from  stamps,  and  that  of  the  permanent  internal  revenues.  Yet  it  is  believ- 
d  that  these,  exclusively  of  the  stamp  duties,  may  safely  be  estimated,  for 
the  average  of  the  years  1802 — 1809,  at  an  annual  sum  not  less  than 
650,000  dollars. 

In  order,  however,  to  secure  that  amount,  a  revision  of  the  system  so  far  as 
it  relates  to  country  stills,  is  essentially  necessary.  Whilst  the  owners  of 
small  distilleries,  in  some  parts  of  the  Union,  complain  of  the  operation  of  a 
tax  raised  on  the  capacity  of  their  stills,  that  same  regulation  has  enabled 
all  those  whose  capitals  are  larger,  and  local  situation  more  advantageous, 
especially  in  the  middle  States,  to  reduce  the  actual  duty  on  the  quantity  of 
spirits  distilled  from  grain  to  about  three  cents  per  gallon.  But  improve- 
ments have  lately  been  introduced,  which,  by  accelerating  the  process  of 
distillation,  will,  according  to  the  estimate  of  the  Commissioner  of  the  Reve- 
nue, reduce  the  duty  on  stills  to  about  three-fifths  of  a  cent  per  gallon  of 
spirits  distilled."  The  effect  of  these,  on  the  revenue,  has  already  been  sensi- 
bly felt,  in  one  of  the  most  productive  districts  of  the  United  States;  and, 
unless  it  shall  be  counteracted,  either  by  restricting  laws,  or  by  an  increase 
of  the  duty  on  the  capacity  of  the  stills,  or  by  a  change  of  the  subject  of  taxa- 
tion, a  considerable  defalcation  must  be  expected. 

Whatever  mode  may  be  adopted,  it  is  respectfully  submitted,  whether  the 
revenue  may  not  be  benefited,  and  just  grounds  of  complaint  removed,  by  a 
repeal  or  modification  of  the  clause  which  compels  a  yearly  entry  of  stills,  in 
the  month  of  June,  under  a  penalty  of  250  dollars,  by  a  permission  to  per- 
sons who  take  short  licenses,  to  continue  distilling  beyond  the  time  limited 
in  their  licenses,  on  paying  a  proportionate  duty;  and  by  reducing,  into 
one  act,  all  the  laws  in  relation  to  duties  on  stills  and  domestic  distilled 
spirits. 

It  will  appear  by  the  same  statement  M,  that,  whilst  the  expenses  of  col- 
lection on  merchandise  and  tonnage,  which  are  defrayed  out  of  the  revenue, 
do  not  exceed  4  per  cent.,  those  on  the  permanent  internal  duties  amount 
to  almost  20  per  cent.  This,  however,  is  an  inconvenience,  which,  on  ac- 
count of  the  great  number  of  individuals  on  whom  the  duties  are  raised, 
and  of  their  dispersed  situation  throughout  the  whole  extent  of  the  United 
States,  must*  more  or  less,  attach  to  the  system  of  internal  taxation,  so  long 
as  the  wants  of  government  shall  not  require  any  considerable  extension, 
and  the  total  amount  of  revenue  shall  remain  inconsiderable. 

3.  Sales  of  Public  Lands. — The  only  data  on  which  to  calculate  the  an- 
nual revenue,  which  may  probably  be  derived,  for  the  ensuing  eight  years, 
from  those  sales,  are  the  quantity  of  land  at  the  disposal  of  government,  com- 
pared with  the  probable  annual  demand,  and  the  actual  sales  which  have 
taken  place  since  the  several  Land  Offices  have  been  opened. 

The  precise  quantity  cannot  be  ascertained,  all  the  surveys  not  being  yet 
completed,  and  the  western  boundary  line  of  the  Virginia  reservation,  from 
the  head  spring  of  the  Little  Miami  northward,  being  neither  surveyed,  nor 
even  the  principle  on  which  its  course  must  depend,  determined  by  the 
terms  of  cession  accepted  by  Congress. 
29 


220  REPORTS  OF  THE  [1801. 

The  estimate  N,  may,  however,  be  considered  so  far  correct,  as  to  render 
it  certain,  that  the  quantity  of  public  lands  northwest  of  the  Ohio  within  the 
Indian  boundary  line,  and  not  yet  disposed  of,  amounts  to  very  near  nine  mil- 
lions of  acres.  A  general  map  of  those  lands,  including  the  Virginia  reservation 
and  the  grants  to  the  Ohio  Company  and  to  John  C.  Symmes,  which  has 
been  compiled  from  the  survey  of  the  Indian  boundary  line  and  from  the 
draughts  returned  to  the  Treasury  Department,  will  be  transmitted  to  Con- 
gress, and  will  more  clearly  explain  their  relative  situation  than  could  be 
done  by  any  written  description. 

The  statement  0,  shows  the  actual  sales  which  have  taken  place  in  the 
several  Land  Offices,  to  the  31st  day  of  October  last.  By  this  it  appears  that 
398,646  acres  have  been  sold,  for  834,887  dollars;  of  which  sum,  248,461 
dollars  have  been  paid,  and  $586,426  remain  due,  being  payable  under  the 
law  in  instalments,  bearing  interest  from  the  date  of  sales,  and  which  will 
become  due  in  the  years  1802  and  1805,  in  the  proportions  exhibited  in  the 
statement. 

The  quantity  of  land  sold,  either  at  the  public  sales  of  the  three  Land  Of- 
fices of  Marietta,  Chillicothe  and  Cincinnati,  or  at  private  sale  at  Steubenville, 
when  the  Land  Office  was  first  opened,  cannot  afford  any  just  data,  on  which 
to  predicate  an  estimate  of  the  probable  annual  sales;  as  they  may  be  sup- 
posed to  have  been  greater  when  the  lands  were  first  offered  for  sale  than 
at  subsequent  periods. 

Rejecting,  therefore,  the  result  of  the  whole  of  the  public  sales,  and  that 
of  the  first  two  months  private  sales,  at  Steubenville,  it  appears,  that  there 
have  been  sold,  at  private  sale,  122,673  acres,  at  Steubenville,  during  a  peri- 
od of  14  months,  ending  the  31st  day  of  October  last — 64,205  acres  at  Chil- 
licothe, during  a  period  of  five  months,  ending  on  the  same  day — 42,658 
acres  at  Cincinnati,  during  a  period  of  six  months,  ending  on  the  same  day; 
and  1,544  acres  at  Marietta,  during  a  period  of  sixteen  months,  ending  on 
the  same  day — which  gives,  in  the  whole,  a  result  of  345,000  acres,  annual 
sales,  in  all  the  Land  Offices. 

The  reservations  in  the  grants  to  the  Ohio  Company,  and  to  John  C. 
Symmes,  and  in  the  townships  formerly  sold  at  New  York;  the  surplus  of 
the  tract  appropriated  for  military  bounties,  after  the  same  shall  have  been 
satisfied;  and  a  tract  of  near  one  million  of  acres,  lying  north  of  Symmes' 
patent,  and  contained  between  the  Great  Miami  and  the  Virginia  reserva- 
tion, are  not  embraced  in  this  general  result.  The  reservations,  and  the  mil- 
itary tract,  are  not  yet  disposable  by  any  existing  law;  and  the  tract  lying 
between  the  Great  Miami  and  the  Virginia  lands,  has  been  only  partially- 
offered  for  sale,  under  the  act  of  Congress  giving  a  right  of  pre-emption  to 
certain  purchasers,  under  J.  C.  Symmes.  The  result  of  the  operation  of 
this  act,  has  not  yet  been  ascertained.  It  is,  however,  known,  that  under 
it  a  number  of  tracts  have  been  sold,  and  some  payments  already  made. 
The  remainder  of  the  tract  will,  afterwards,  according  to  law,  be  surveved, 
and  offered  for  sale  on  the  same  terms  as  other  lands. 

Taking  in  consideration  the  probable  sales  in  those  several  tracts,  the  to- 
tal amount  of  annual  sales  might  fairly  be  estimated  at  400,000  acres,  if  the 
periods  during  which  the  Land  Offices  have  been  opened,  had  been  sufficient- 
ly long,  to  form  a  safe  basis  for  calculation.  To  estimate  them  at  250,000 
acres  a  year,  for  the  ensuing  eight  years,  is  equally  justifiable,  by  the  actual 
sales,  by  the  known  usual  demand,  and  by  the  quality  and  superior  safety  of 
litle  of  the  public  lands. 


1801.]      SECRETARY  OF  THE  TREASURY.         221 

The  nominal  price  of  those  lands  is  two  dollars  per  acre,  but  on  account 
of  the  provisions  which  relate  to  interest  and  discount,  they  may  be  obtain- 
ed, within  a  fraction,  at  the  rate  of  one  dollar  and  eighty-four  cents,  if  the 
whole  purchase  money  is  paid  at  the  time  of  sale;  and  may  bring  in  the 
Treasury  two  dollars  and  twenty-seven  cents  per  acre,  if  the  purchaser 
shall  avail  himself  of  the  terms  of  credit  given  by  law. 

If  the  proceeds  of  the  whole  sales  shall  be  estimated  only  at  the  rate  of 
$1  ^\\  per  acre,  it  will  allow  24  per  cent,  for  losses  on  account  of  non-pay- 
ments on  the  three  last  instalments;  and,  after  the  year  1805,  give,  on  an  an- 
nual sale  of  250,000  acres,  an  annual  income  of  460,000  dollars.  But,  as  on 
account  of  the  credit  given  by  law,  the  whole  of  this  sum  will  not,  till  after 
the  year  1805,  be  annually  receivable,  in  payment  of  lands  sold  after  1st  of 
January  next;  whilst,  on  the  other  hand,  the  sums  due  for  lands,  sold  before 
the  end  of  this  year,  will  become  payable  during  the  four  next  ensuing  years; 
it  will  be  found  that,  making  the  same  deduction  of  24  per  cent,  for  losses 
on  the  sums  already  due,  the  whole  sum  receivable,  for  lands  already  sold, 
or  to  be  sold,  during  the  eight  years  1802 — 1809,  will,  for  those  eight  years, 
on  an  average,  amount  annually  to  400,000  dollars. 

Some  legislative  provisions  seem  necessary  to  ss certain  the  western  boun- 
dary of  the  Virginia  lands:  to  define,  in  what  manner  the  seven  first  ranges 
of  townships  shall  be  subdivided  into  sections,  without  interfering  with  the 
claims  of  former  purchasers;  and,  perhaps,  in  relation  to  the  lands  claimed 
by  purchasers  under  John  C.  Symmes.  But  the  most  important  object,  in 
order  to  secure  and  improve  this  valuable  branch  of  revenue,  is  to  provide 
against  the  progress  of  intrusions  on  the  public  lands,  and  especially  to  de- 
vise some  efficient  and  prompt  mode  of  giving  quiet  possession  to  every 
person  purchasing  under  the  law.    . 

4.  Postage,  dividends  on  Bank  Shares,  Incidental. — The  annual  pro- 
ceeds of  the  duties  on  postage,  may  not  be  estimated  at  less  than  50,000  dol- 
lars. 

The  dividends  on  bank  shares,  at  the  rate  of  8  per  cent,  dividend,  amount 
to  70,040  dollars.  But,  as  the  shares  themselves  may  eventually  be  wanted 
as  a  resource  to  meet  certain  contingent  demands  against  the  United  States, 
those  dividends,  although  constituting  a  part  of  the  revenue,  unless  it  shall 
be  found  necessary  to  sell  the  stock. and  the  incidental  or  temporary  reve- 
nues, shall  be  omitted  in  this  estimate  of  the  permanent  revenues 

These,  therefore,  are  estimated  in  the  whole  at  10,600,000  dollars,  viz: 
Duties  on  merchandise  and  tonnage,  9,500,000 

Internal  duties,  (stamps  excepted,)  650,000 

Proceeds  of  the  sales  of  public  lands  400,000 

Duties  on  postage  50,000 

The  other  temporary  resources  of  the  United  States,  are, 

1st.  The  proceeds  of  stamp  duties,  for  the  14  months  from  the  1st  Janu- 
ary, 1802,  to  the  4th  March,  1803,  which,  under  the  existing  law,  limits 
their  continuance,  260,000  dollars. 

2d.  The  balance  due  on  the  direct  tax.  The  amount  paid  in  the  Treasury 
to  the  1st  instant,  so  far  as  the  same  can  be  ascertained,  was  1,245,000  dol- 
lars, leaving  an  outstanding  sum  of  755,000  dollars;  but,  as  this  last  sum 
is  chargeable  with  all  the  expenses  of  collection,  estimated  at  the  rate  of  7 
per  cent.,  at  140,000  dollars;  the  real  balance  is  only  about  615,000  dollars; 
and  as  delays,  and  perhaps  an  eventual  loss  may  be  expected,  on  the  last 


£22  REPORTS  OF  THE  [1801. 

part  of  the  collection,   it  would  not  be  safe  to  estimate  the  amount  which 
will  probably  be  paid  in  the  Treasury,  at  more  than  450,000  dollars. 

3d.  The  proceeds  of  sales  of  public  vessels.  Fifteen  vessels  have  been 
sold  under  the  act  of  last  session  of  Congress,  for  275,767  dollars  and  73 
cents;  of  wh  ch  sum,  86,412  dollars  and  83  cents  had  been  paid,  on  the  30th 
of  September  last,  leaving  an  outstanding  balance  of  189,354  dollars  and 
90  cents. 

4th.  The  excess  of  specie  in  the  Treasury,  beyond  the  sum  which  it  is 
prudent  to  keep  there,  may  be  estimated  at  about  one  million  of  dollars. 

5th.  The  shares  of  the  Bank  of  the  United  States,  owned  by  the  United 
States,  are,  at  33|  per  cent,  advance,  worth  1,184,000  dollars. 

Those  several  items,  exclusively  of  several  balances  due  by  individuals, 
and  a  part  of  which  will  eventually  be  received  into  the  Treasury,  consti- 
tute a  sum  exceeding  three  millions  of  dollars;  and  may,  for  the  present,  be 
considered  as  resources,  sufficient  to  meet  the  demands  against  the  United 
States,  which   may  be  eventually  payable  on  account  of  the  sixth  article  of 

the  treaty  with  Great  Britain,  and  of  the article  of  the  Convention 

with  France. 

The  permanent  expenditures  of  the  United  States,  relate  either  to  the  cur- 
rent expenses  of  Government,  domestic  or  foreign,  civil  and  military,  or 
to  the  payment  of  the  interest  and  principal  of  the  public  debt. 

The  estimates  of  appropriations,  for  the  ensuing  year,  amounting  to  3,448,- 
147  dollars  and  IS  cents,  include  all  the  expenses  of  Government,  other  than 
those  in  relation  to  the  public  debt,  with  the  exception  of  those  incident  to 
the  intercourse  with  the  Barbary  powers — estimated,  after  the  ensuing  year, 
by  the  Secretary  of  State,  at  70,000  dollars;  of  those  which  may  be  incurred 
tor  the  purchase  of  arms — estimated,  by  the  Secretary  of  War,  at  55,000  dol- 
lars; and  of  a  part  of  the  Indian  annuities,  amounting  to  11,000  dollars: 
these  items  having  been  omitted,  in  the  estimates  of  the  ensuing  year,  be- 
cause the  balances  of  unexpended  appropriations  have  been  considered  as 
sufficient  for  those  objects,  by  the  Secretaries  of  State  and  War,  respectively. 
On  the  other  hand,  a  sum  of  about  70,000  dollars,  in  relation  to  the  census 
and  quarantine  laws,  which  is  included  in  those  estimates,  is  a  temporary 
expense. 

The  particular  sums,  which,  under  existing  laws,  seem  necessary  to  de- 
fray each  particular  authorized  expense,  being  detailed  in  the  annual  esti- 
mates, will  not  be  repeated  here;  and  it  appears  sufficient  to  recapitulate  the 
gross  amount  of  the  general  heads  of  expenditure,  viz. 

For  all  domestic  expenses  of  a  civil  nature,  including  the 
civil  department,  and  all  the  miscellaneous  items  of  the  light- 
houses and  mint  establishments,  of  the  surveying  depart- 
ment, of  pensions,  claims  and  contingencies,  $  780,000 

For  all  the  expenses  of  intercourse  with  foreign  nations,  in- 
eluding  those  of  the  diplomatic  department,  those  incident  to 
the  prosecution  of  claims,  and  to  the  protection  of  seamen  in 
foreign  countries,  and  those  in  relation  to  the  Barbary  powers,  200,000 

For  the  Military  establishment,  including  all  the  expenses  in 
relation  to  the  army,  to  arsenals  and  magazines,  to  the  fabri- 
cation and  purchase  of  arms  and  military  stores,  to  fortifications, 
and  to  the  Indian  Department,         -  1,420,000 

Fqr  the  Navy  Department,  including  all  the  expenses  in 


1801.]  SECRETARY  OF  THE  TREASURY.  933 

relation  to  the  ships  kept  in  commission,  or  laid  up  in  ordina- 
ry, to  the  building  of  new  ships,  and  to  dock-yards,  -  1,100,000 


Making  altogether,  three  millions  and  five  hundred  thou- 
sand dollars,  -  -  -  -  -  $  3,500,000 


Which  sum,  deducted  from  the  estimated  revenue  of  ten  millions  and  six 
hundred  thousand  dollars,  leaves  a  sum  of  seven  millions  and  one  hundred 
thousand  dollars,  annually  applicable  to  the  payment  of  interest  and  redemp- 
tion of  the  principal  of  the  public  debt. 

It  must  be  further  observed,  that  the  sums  assigned  to  each  head  of  expen- 
diture, being  deduced  from  the  estimates  of  appropriations  necessary  for 
the  ensuing  year;  and  these  having  been  calculated  before  the  re-establish- 
ment of  peace  in  Europe  was  known,  they  are  predicated,  for  every  item 
which  relates  to  supplies,  on  the  then  existing  prices,  a  considerable  re- 
duction will  take  place  in  every  item,  which  depends  on  the  price  of  provi- 
sions, freight,  transportation,  and  even  wages.  Although  the  saving,  thence 
arising,  cannot  yet  be  correctly  ascertained,  it  may  not  be  estimated  at  less 
than  200,000  dollars  annually.  It  is  therefore  believed,  that,  after  defray- 
ing every  expense  necessary  to  support  every  civil,  military,  or  naval  estab- 
lishment, to  the  extent  now  authorized  by  law,  the  annual  surplus  applica- 
ble to  the  debt,  may  be  confidently  estimated  at  seven  millions  and  three 
hundred  thousand  dollars. 

The  statement  P,  exhibits  the  amount  of  the  unredeemed  principal  of  the 
public  debt,  as  it  will  be  on  the  1st  of  January  next,  and  of  the  annual  in- 
terest and  charges  payable  thereon,  including  the  annual  reimbursement  on 
the  six  per  cent,  and  deferred  stocks. 

By  the  printed  statements  of  receipts  and  expenditures  for  the  year  1800, 
transmitted  to  Congress  the  first  week  of  the  present  session,  it  appears, 
that  the  unredeemed  principal  of  the  public  debt,  (exclusively  of  the  sums 
passed  to  the  credit  of  the  Commissioners  of  the  Sinking  Fund,  which  are 
only  a  nominal  debt  due  by  the  United  States  to  themselves;  and  after  de- 
ducting the  reimbursement  of  the  principal  of  the  six  per  cent,  stock,  operated 
by  the  annual  payment  of  eight  percent,  on  the  nominal  amount  of  that 
stock,)  amounted,  on  the  1st  of  January,  1801,  to  80,161,207  dollars  and  60. 
cents.  By  the  statement  P,  it  appears  that  the  unredeemed  principal  will, 
on  the  1st  of  January,  1802,  amount  to  77,881,8.90  dollars  and  29  cents;  the 
difference  of  2,279,317  dollars  and  31  cents,  being  the  amount  of  principal 
paid  during  the  year  1S01;  during  the  same  year  1S01,  more  than  eight  hun- 
dred thousand  dollars  shall  have  been  remitted  to  Holland,  in  part  of  the  in- 
terest and  instalments  on  the  Dutch  debt,  falling  due  next  year,  which  sum 
is  not  included  in  the  amount  of  principal  thus  stated  to  have  been  paid 
during  the  present  year.  The  sums  which,  on  the  1st  January,  1801,  had 
been  remitted  to  Holland,  in  part  of  the  interest  and  instalments  due,  in  the 
course  of  this  year,  and  which  were  not  deducted  from  the  amount  of  public 
debt  on  the  1st  of  January,  1801,  did  not  exceed  five  hundred  thousand  dol- 
lars. The  amount  of  debt  actually  paid,  or  for  the  payment  of  which  provi- 
sion shall  have  been  made  during  the  present  year,  will  not,  therefore,  be  less 
than  two  millions  five  hundred  thousand  dollars.  And  it  is  believed, 
though  it  cannot  at  present  be  precisely  ascertained,  that  the  balance  of 
specie  in  the  Treasury,  which,  on  the  1st  January,  1801,  was  2,557,395  dol- 
lars and  38  cents,  will  not  be  diminished  on  the  1st  of  January,  1802, 


224  REPORTS  OF  THE  [1801. 

The  Treasury  accounts  being  settled  to  the  30th  day  of  September  last, 
the  amount  of  public  debt  paid  during  the  half  year  commencing  on  the  1st 
of  April,  and  ending  on  the  30th  September,  1801,  as  weil  as  the  compara- 
tive view  of  the  Treasury  at  the  commencement  and  end  of  that  period,  may 
be  precisely  stated.  The  payments  in  part  of  the  principal  of  the  debt  made 
during  those  six  months,  exclusively  of  certain  parts  of  the  unfunded  debt 
which  have  been  reimbursed,  have  been — 

1st.  To  the  Commissioners  of  the  Sinking  Fund,  and  to 
be  by  them  applied,  on  the  1st  of  January  next,  to  the  reim- 
bursement of  the  six  per  cent,  stock,  -  -  -    g  129,048  83 

2d.  To  the  Bank  of  the  United  States,  on  account  of  the 
principal  of  sundry  temporary  loans,  formerly  obtained  from 
that  institution,  -  -  -  -  -        500,000  00 

3d.  For  remittances  to  Holland,  on  account  of  the  Dutch 
debt,  782,665~dollars  and  79  cents;  from  which,  deducting 
245,980  dollars  and  50  cents,  being  the  interest  and  commis- 
sions for  one-half  of  the  year  1801,  on  that  debt,  leaves,  paid  on 
account  of  the  principal,     -  -  -  536,685  29 

4th.   Evidences  of  public  debt  paid  for  lands,        -  -  21,282  66 


Amounting  altogether  to  one  million  one  hundred  and 
eighty-seventhousand  and  sixteen  dollars  and  seventy-eight 
cents.  ------  $  1,187,016  78 


The  balance  of  specie  in  the  Treasury  amounted,  on  the  1st  April,  1S01, 
to  1,794,044  dollars  and  85  cents,  and  on  the  1st  of  October,  1801,  to 
2,946,038  dollars  and  73  cents;  making  a  difference,  in  favor  of  the  Treasury, 
of  1,151,993  dollars  and  8S  cents;  which  last  sum,  added  to  the  above  slated 
payments  on  account  of  the  principal  of  the  debt,  makes  an  actual  difference 
in  favor  of  the  United  States,  of  2,339,010  dollars  and  66  cents,  duringthose 
six  months. 

The  principal  of  the  public  debt  unredeemed  on  the  1st  January,  1802,  is 
in  the  statement  P,  arranged  under  four  heads,  viz. 

1st.  Six  per  cent  and  deferred  stocks.  The  nominal  amount  of  this  debt  is 
41,879,525  dollars  J2^,  and  the  eight  per  cent,  annuity,  applicable  to  its  in- 
terest and  reimbursement  of  principal,  amounts  to  3,350,362  dollars  and  1 
cent.  As,  by  the  effect  of  this  annuity,  5,027,740  dollars  and  57  cents  of  the 
principal  shall  have  been  reimbursed  on  the  1st  of  January,  1802;  the  unre- 
deemed principal  of  that  debt,  will,  on  that  day,  be  only  36,S51,784  dollars, 
66  cts.  The  interest  at  the  rate  of  six  per  cent,  on  which  sum  is  $2,211,107 
OScts.  The  part  of  the  eight  per  cent  annuity,  at  present  applicable  to  the  re- 
demption of  the  principal,  is,  therefore,  1,139,254  dollars  and  3  cents,  and 
increasing  each  year  at  compound  interest,  shall,  without  any  further  provi- 
sion, have  discharged  the  whole  of  the  six  per  cent,  in  the  year  1818,  and 
the  whole  of  the  deferred  debt  in  the  year  1824. 

2d.  Three  per  cent,  stock  amounts  to  -  -         $19,079,705  63 


and  the  interest  on  the  same  to  572,391   16 

No  provision  has  been  made  for  its  redemption,  occasional  payments  for 
lands  excepted. 

3d.  All  the  other  domestic  debts  created,  under  the  present  government 


1801.]  SECRETARY  OF  THE  TREASURY.  335 

of  the  Union,  in  order  either  to  discharge  other  debts,  or  to  meet  certain 
extraordinary  expenses.  These  include  the  five  and  half,  four  and  half, 
navy  six,  1796  six  and  eight  per  cent,  stocks,  and  the  temporary  loans  ob- 
tained from  the  bank;  and  amount,  altogether,  to         -         $12,035,400  00 


The  interest  on  all  these  constitutes  an  item  of        -  828,350  50 

4th.  The  foreign  debt  due  in  Holland  and  ati\.ntwerp,  amounts,  including 
premiums  and  gratifications,  to  -  $9,915,000 


The  interest  on  which,  commissions  and  charges  included, 
is,  for  the  year  1802         -;  -  -  -  -  8476,931 

This  last  debt  being  payable  in  instalments,  at  certain  fixed  dates,  and 
it  being  necessary  to  purchase  remittances  in  America,  near  six  months  be- 
fore the  payments  are  made  in  Holland,  the  statement  R,  has  been  added  to 
show  the  payments,  both  on  account  of  principal  and  interest,  which  become 
annually  due  in  Holland,  until  the  final  redemption  of  the  debt  in  1809,  and 
the  sums  which  it  will  be  necessary,  every  year,  to  provide  in  America,  in 
order  to  meet  those  payments. 

The  greater  part  of  this  debt  becomes  due  in  the  course  of  the  five  next- 
ensuing  years;  and  the  annual  payments,  on  account  of  principal  and  interest 
for  that  period,  exceed,  on  an  average,  two  millions  of  dollars.  The  in- 
convenience and  difficulty  of  procuring  remittances  to  that  amount,  and  the 
real  injury  arising  from  such  heavy  disbursements  abroad,  render  an  exten- 
sion of  the  terms  of  payment,  by  partial  re-loans,  a  desirable  object;  and 
measures  have  been  taken  to  ascertain  its  practicability.  All  that  seems 
wanted,  is,  that  the  gross  amount  of  payments,  which  are  to  take  place 
during  the  eight  next  years,  should  be  more  equally  apportioned  amongst 
those  years;  and  any  greater  surplus  of  revenue  which  might  be  freed  by 
that  operation,  would  be  applicable  to  the  redemption  of  those  species  of 
the  domestic  debt,  which  it  may  be  thought  most  eligible  to  reimburse. 

Whether  this  operation  shall  be  effected  or  not,  no  difficulty  is  appre- 
hended, from  want  of  resources,  to  discharge  every  instalment  as  it  shall 
become  due;  the  sum  payable  in  1S03,  in  which  year  the  largest  payments 
must  be  made  in  Holland,  amounting,  including  both  those  and  all  other  ac- 
tually due,  on  account  of  the  interest  and  reimbursement  of  the  domestic 
debt,  to  only  $7,100,000,  orto  $200,000  less  than  the  annuity  of  §7,300,000, 
which  has  been  estimated  as  the  surplus  of  revenue  applicable  to  that  object. 

If  that  surplus  does  exist,  and  if  it  will  be  sufficient  to  meet  all  the  en- 
gagements of  the  United  States,  as  they  become  due,  the  only  remaining 
objects-  of  inquiry  seem  to  be:  What  impression  will,  during  the  next  eight 
years,  to  which  these  estimates  *  refer,  be  made  on  the  public  debt,  by  the 
annual  application  of  that  surplus?  In  what  time  would  the  same  annuity 
discharge  the  whole  of  the  public  debt? 

The  statement  S,  exhibits  the  effect  produced  at  the  end  of  the  year  1809 
on  the  debt,  by  the  annual  application  of  that  sum,  (§7,300,000,)  to  the 
payment  of  both  principal  and  interest,  and  shows  that,  at  the  end  of  those 
eight  years,  it  shall  have  paid  the  whole  of  the  Dutch  debt;  of  the  tempo- 
rary loans  due  to  the  bank;  of  the  navy  six  per  cent;  and  of  the  five  and 
a  half  per  cent,  stocks;  $5,525,300  and  38  cents  of  the  eight  per  cent,  stock; 
$150,387  and  26  cents  of  the  four  and  a  half  per  cent,  stock;  and  $11,399,263 
and  6  cents  of  the  principal  of  the  six  per  cent,  and  deferred  stocks:  amount- 


226  REPORTS  OF  THE  [1801. 

ing,  altogether,  to  thirty-two  millions  two  hundred  and  eighty-nine   thou- 
sand one  hundred  and  fifty  dollars  and  seventy  cents. 

The  public  debt  would,  therefore,  on  the  1st  January,  1810,  be  re- 
duced to  $45,592,739  and  59  cents,  viz:  $954,899  and  62  cents  of  the  eight 
per  cent,  stock;  $25,612  and  74  cents  of  the  four  and1  a  half  per  cent,  stock; 
(both  of  which  would  be  discharged  during  the  four  first  months  of  the  year 
1810;)  $80,000  of  the  1796  six  per  cent,  stock;  $25,452,521  and  60  cents 
of  the  six  per  cent,  and  deferred  stocks;  and  the  $19,079,705  and  63  cents 
three  per  cent  stock. 

It  is  true  that  this  statement  is  predicated  on  the  supposition,  that  the 
whole  of  the  remittances  to  Holland  may  be  purchased  at  par,  which  is 
not  probable:  but,  on  the  other  hand,  it  is  calculated  on  the  principle  of  a 
yearly,  instead  of  a  quarter  yearly  payable  annuity;  or  as  if  all  the  pay- 
ments made  in  one  year,  on  account  of  the  principal  of  the  debt,  took  place 
only  at  the  end  of  the  year,  instead  of  being  made,  as  will  be  the  case,  in 
the  course  of  the  year,  and  stopping  the  interest  from  the  end  of  the  quarter 
in  which  they  may  be  made.  The  supposed  extra  cost  of  bills  on  Holland, 
is  at  least  partly  covered  by  that  difference,  and  cannot  materially  affect  the 
general  result. 

It  may  in  the  same  manner  be  shown,  that  the  same  annual  sum  of 
$7,300,000,  applied  to  the  payment  of  the  principal  and  interest  of  the 
public  debt,  would,  on  the  supposition  that  the  whole  of  the  six  per  cent, 
and  deferred  stocks  may  be  redeemed  at  par,  and  that  the  whole  of  the  three 
per  cent,  stock  should  be  reimbursed  at  its  nominal  value,  discharge  the 
whole  of  the  public  debt  in  seven  years  and  a  half,  after  the  year  1809,  or 
within  the  year  1817. 

The  only  part  of  the  preceding  estimates,  which  is  liable  to  any  mate- 
rial error,  is  what  relates  to  the  probable  annual  revenue  derived  from  the 
impost  and  from  the  sales  of  land.  Should  these  prove  to  have  been  cor- 
rect, it  will  result,  that  the  present  revenues  of  the  Union  are  sufficient  to 
defray  all  the  expenses,  civil  and  military,  of  government,  to  the  extent 
authorized  by  existing  laws;  to  meet  all  the  engagements  of  the  United 
States;  and  to  discharge,  within  eight  years,  thirty-two  millions. of  dollars 
of  the  principal,  and,  within  fifteen  years  and  a  half,  the  whole  of  the 
public  debt;  that  any  increase  of  expense  will,  probably,  either  render  an 
increase  of  taxes  necessary,  or  retard  the  ultimate  payment  of  the  debt;  and 
that  any  reduction,  in  the  present  rate  of  expenditure  may  permit  a  reduc- 
tion of  the  present  taxes,  or  be  the  means  of  accelerating  the  redemp- 
tion of  the  public  debt. 

All  which  is  most  respectfully  submitted. 

ALBERT  GALLATIN, 

Secret ary  of  the  Treasury. 
Treasury  Department,  18th  December ',  1801, 


1801.]  SECRETARY  OF  THE  TREASURY.  227 

Table  of  Duties  paid  on  Merchandise,  imported  in  American  Vessels,  in 

the  United  States. 

Goods,  wares,  and  merchandise,  imported  in  the  United  States,  unless 
free  of  duty,  pay  either  duties  according  to  their  value,  or  specific  duties 
according  to  their  quantity. 

I.  Articles  free  of  duty,  are — 

All  articles  of  American  growth,  produce,  or  manufacture,  spirits  ex- 
cepted. 

Bullion,  copper^  old  pewter,  tin,  teutenague,  wire,  plaster  of  Paris, 
saltpetre,  sulphur,  lapis  calaminaris,  dying  drugs  and  woods,  wood, 
wool,  furs,  raw  hides,  sea  stores,  wearing  apparel,  personal  baggage, 
and  implements  of  trade  belonging  to  emigrants;  philosophical  appa- 
ratus imported  for  the  use  of  seminaries  of  learning. 

II.  Articles  paying  duties  ad  valorem,  pay  either  20,  15,  or  12^  percent. 

on  their  respective  value,  which  value  is  calculated  by  adding  to  their 
prime  cost  (all  charges  included)  ten  per  cent.,  if  imported  from  coun- 
tries this  side,  and  20  per  cent,  if  imported  from  countries  beyond  the 
Cape  of  Good  Hope. 

Articles  paying  20  per  cent,  ad  valorem,  are — 

Carriages  and  parts  of  do. 

Manufactures  of  glass,  other  than  window  glass  and  black  quart  bottles. 

Articles  paying  15  per  cent,  ad  valorem  are — 
1st.  All  manufactures  of  metal*,  earth  and 
stonet,  and  leather,  ^ 
All  fruits  and  spices, 
All  painter's  colors  and  medicinal  drugs, § 
2d.  Cabinet  wares,  hair-powder,  starch,  and  wafers;  oil,  anniseed,  glue, 
essences,  washes,  perfumes,  dentrifice  and  cosmetics;  paperhang- 
ing,  cartridge,  and  sheathing  paper;  carpets,  carpeting,  floor  cloths 
and  mats;  bonnets,  hats,  caps,  gloves  and  mittens,  and  stockings; 
fringes  and  tassels  for  saddlers,  upholsterers,  and  coachmakers; 
buttons,  millinery,  artificial  flowers,  feathers,  ornament  dresses, 
dolls,  and  fans. 

Articles  paying  \2h  per  cent,  ad  valorem — 

1st.  The  following  manufactures  of  metal,  viz: — Anchors,  locks,  hinges, 
hoes,  anvils,  vices,  and  printing  types. 

2d.  Gunpowder,  black  quart  bottles,  saddles  and  parts  of  do.,  whips 
and  canes,  toys,  lampblack,  parchment  and  vellum,  clothing  ready 
made. 

*  Including  arms,  cannon,  plated  ware  and  jewellery,  buckles  and  buttons,  clocks  and 
watches,  gold  and  silver  lace.  Excepting  the  articles  free  of  duty,  those  enumerated  as 
paying  12£  per  cent.,  and  lead,  nails,  spikes,  steeL  wool  and  cotton  cards,  which  pay  specific 
duties. 

|  Including  China,  queens,  and  earthen  ware,  window  glass,  bricks  and  tiles,  marble  and 
slate,  pastework,  and  jewellery.     Excepting  articles  free  of  duty  and  hollow  glass  ware. 

%  Excepting  saddles  and  saddlery,  which  pay  only  12^  per  cent.;  boots  and  shoes,  which 
pay  specific  duties. 

§  Excepting  lampblack,  which  pays  \2\  per  cent.,  and  colors  of  lead,  which  pay  a  spe- 
cific dutv  of  one  cent  per  pound. 
.30 


not  otherwise  enume- 
rated. 


REPORTS  OF  THE 


[1801. 


3d.  All  wares,  goods,  and  merchandise,  not  otherwise  enumerated,  con- 
sisting principally  of  manufactures  of  wool,  cotton,  silk,  hemp  and 
flax,  and  wood. 

III.  Articles  paying  specific  duties — 

SPIRITS. 


FOREIGN. 

DOMESTIC 

From  grain. 

From  other  ma- 
terials. 

From  domestic 
materials. 

From  foreign 
materials. 

Per  ga 

'Ion. 

1st  proof     -. - 

2d     do.        -     - 
3d     do.        -     - 
4th   do.        -     - 
5th    do.        -     - 
6th    do.        -     - 

28  cents  ) 

29  do.     5 
31   do. 

34  do. 
40  do. 
50  do. 

25  cents. 

28     do. 
32     do. 
38     do. 
46     do. 

7  cents. 

8  do. 

9  do. 
11     do. 
13     do. 
18     do. 

15  cents. 

16  do. 

17  do. 
19     do 
23     do. 
30     do. 

WINES— Per  gallon. 

Madeira,  London  Particular,  and  Malmsey 

Do.        all  other        - 
Burgundy,  Champaign,  Rhenish,  Tokay 
Sherry  and  St.  Lucar  - 

Lisbon,  Oporto,  and  other  Portugal 

Teneriffe,  Fayal,  Malaga,  St.  George,  and  Western  Islands  28 
All  other,  in  bottles  -  - 

All  other  -  -  - 

ALE,  BEER,  and  PORTER, 

MOLASSES,      ----- 

SUGAR— Per  pound. 

Loaf  -  -  -  -  -   . 

Lump,  and  other  refined  '--.'- 

Candy  - 

White,  powdered 
Brown  - 

TEAS — Imported — Per  pound. 

Fro?'i  China  or        From  Europe 


5S  cents 

50 

do. 

45 

do. 

40 

do. 

30 

do. 

28 

do. 

35 

do. 

23 

do. 

8  cents  per  gallon. 
5  cents  per     do. 


9 

6* 
114 


cents, 
do. 
do. 
do. 
do. 


Hyson,   Imperial, 
der  and  Gomee 
Other  green 
Bohea 
Other  black 

COFFEE, 
SALT, 


Gunnow- 


East  Indies. 

12  cents. 
18     do. 
32     do. 
20     do. 


14  cents. 
21     do. 


40 
24 


do. 
do. 


From  all  other 
places. 

17  cents. 
27     do. 
50     do. 
30     do. 


5  cents  per  pound. 
■  -  -  20  cents  per  56  lbs. 

For  other  articles  paving  specific  duties,  see  statement  II. 
All  articles  i-mj  orted  in  foreign  vessels,  pay  an  extra  duty  of  ten  per  cent, 
on  the  duty  paid  if  imported  in  American  vessels. 


ispi.] 


SECRETARY  OF  THE  TREASURY. 


229 


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SECRETARY  OF  THE  TREASURY. 


233 


D. 

ST*2  TEMENT  exhibiting  the  quantities  of  Salt  actually  paying  duty9 
for  each  calendar  year,  from  1790  to  1800,  deducting  the  quantities 
exported  and  entitled  to  drawback;  and  also  the  amount  exempted 
from  duly,  on  account  of  bounties  on  the  exportation  of  salted  fish  and 
provisions,  and  of  allowances  to  fisheries,  calculated  at  the  same  rate 
at  which  they  are  now  fixed  by  existing  laws. 


SALT. 

Amount  of 

Bounties  and 

Salt  paving1  duty, 

bounties  and 

allowances  re- 

buslrels   of     56 

allowances. 

duced     into 

bushels  of'salt, 

at  the  present 

rates. 

lb. 

YEARS. 

Imported, 

bushels     of 

56  lb. 

Exported, 

bushels    of 

56  lb. 

1790 

2,196,780 

15,007 

a  447,720 

1,734,053 

1791 

1,S10,421 

3,240 

- 

b  447,720 

1,359,461 

1792 

1,779,510 

204 

44,772 

447,720 

1,331,586 

1793 

2,027,332 

4,383 

89,696 

597,975 

1,424,974 

1794 

2,958,411 

4,783 

107,537 

716,910 

2,236,718 

1795 

2,823,718 

1,475 

81,135 

540,900 

2,281,343 

1796 

3,670,077 

32,108 

93,889 

625,920 

3,012,049 

1797 

2,977,902 

103,633 

92,874 

585,097 

2,288,172" 

1798 

2,753,127 

161,210 

113,904 

569,520 

2,022,397 

1799  - 

2,513,411 

104,025 

149,375 

746,875 

1,662,511 

1800 

3,287,868 

25,950 

105,536 

527,675 

2,734,243 

Note  a  b. — Each  of  those  two  years  estimated  at  the  same  rate  as  the  vear 
1792. 

Treasury  Detartment, 

Register's  Office,  December  12,  1801. 

JOSEPH  NOURSE,  Register. 


234 


REPORTS  OF  THE 


[1801. 


E. 

STATEMENT  of  the  value  of  the  several  classes  of  Merchandise  paying 
duties  ad  valorem,  deducting  export  ations  from  importations,  for  each 
of  the  years  1795  to  1800. 


VALUE  OF  GOODS  AD  VALOREM. 

YEARS. 

Atl0andl2§ 
per  cent. 

At  15  per. 
cent. 

At  20  per 
cent. 

TOTAL. 

1795 

1796 
1797 

1798 
1799 
1800 

23,431,013 

28,267,085 
21,137,877 
19,179,952 
26,394,967 
26,514,393 

6,225,887 
7,85S,262 
6,609,665 
4,570,096 
6,428,842 
7,448,410 

230,073 
371,242 
296,734 
222,212 
270,022 
430,814 

29,886,973 
36,496,589 
28,044,276 
23,972,260 
33,093,831 
34,393,617 

Total    - 

Duties    at   the  ~) 
present  rate  $ 

144,925,287 
18,115,661 

39,141,162 
5,871,174 

1,821,097 
364,219 

185,887,546 
24,351,054 

Note. — On  the  total  value,  as  above,  $185,887,546,  gives,  for  the  aver- 
age duty,  near  13.1  per  cent. 

Treasury  Department, 

Register's  Office,  December  12,  1801. 

JOSEPH  NOURSE,  Register. 


1801.] 


SECRETARY  OF  THE  TREASURY. 


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REPORTS  OF  THE 


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G. 

STATEMENT  of  the  quantities  of  the  several  species  of  Tea  paying 
duties,  after  deducting  the  Exportation^  from  the  Importations,  jor 
each  of  the  years  1790  to  1800. 


TEAS. 

YEARS. 

Bohea. 

Souchong. 

Hyson. 

Other  Green. 

Total. 

1790 

2,059,684 

368,075 

530,613 

SS,870 

3,047,242 

1791 

774,008 

91,123 

107,934 

12,932 

985,997 

1792 

2,332,892 

132,355 

115,263 

33,498 

2,614,008 

1793 

1,548,933 

369,6S7 

82,882 

8,007 

2,009,509 

1794 

2,095,416 

298,503 

29,754 

37,241 

2,460,914 

1795 

2,079,6S7 

146,457 

99,727 

48,247 

2,374,11S 

1796 

1,778,007 

73,578 

239,102 

219,572 

2,310,259 

1797 

1,392,271 

185,359 

206,177 

224,592 

2,008,399 

1798 

1,079,139 

333,349 

194,616 

283,861 

1,890,965 

1799 

3,412,674 

309,598 

240,861 

538,370 

4,501,503 

1800 

1,891,434 

694,802 

533,613 

677,785 

3,797,634 

Total,     - 

20,444,145 

3,002,836 

2,380,542 

2,172,975 

28, 000, 548 

Total  duty, 

2,453,297 

540.519 

761,773 

434,595 

4,190,184 

Note. — The  average  rate  of  duty  is  15  cents  per  pound. 
Treasury  Department, 

Register's  Office,  December  \2th,  1801. 

JOSEPH  NOURSE,  Register 


«*# 


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SECRETARY  OF  THE  TREASURY. 


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REPORTS  OF  THE 


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K. 

STATEMENT  of  the  amount  of  American  and  Foreign  Tonnage,  re- 
spectively, employed  in  Foreign  Trade,  for  each  of  the  years  1790  to 
1799,  as  taken  from  the  records  of  the  Treasury. 


esse                                     

American  ton 

Foreign  Ton- 

Total amount    of 
tonnage  employ- 

Proportion of  foreign 
tonnage  to  the  whole 

YEARS. 

nage  in  foreign 
trade. 

nage. 

ed  in  the  foreign 
trade  of  the  Unit- 
ed States. 

amount  of  tonnage 
employed  in  the  fo- 
reign trade  of  the 
United  States. 

1790 

354,767 

251,058 

605,825 

41.4  to   100 

1791 

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240,740 

604,402 

39.8          do 

1792 

414,679 

244,278 

658,957 

37.             do 

1793 

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164,676 

612,430 

26.8          do 

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525,649 

84,521 

610,170 

13.8          do 

1795 

580,277 

62,549 

642,826 

9.7          do 

1796 

675,046 

49,960 

725,006 

6.9          do 

1797 

608,078 

76,693 

684,771 

11.2          do 

1798 

522,245 

88,566 

610,811 

14.5          do 

1799 

626,495 

109,599 

736,094 

14.9          do 

Average  of  the 

} 

three    years, 

V  377,702 

245,358 

623,060 

39.4  to   100 

1790  to  1792 

3 

Average  of  the 

^ 

six  years,  1793 

V     559,841 

87,827 

647,668 

13.6  to   100 

to  1798 

} 

1 

Treasury  Department, 

Register's  Office,  December  12th,  1801. 

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1801.] 


SECRETARY  OF  THE  TREASURY. 


243 


M. 

STATEMENT  of  the  product  of  the  Internal  Revenues  for  1800. 


PERMANENT. 


Gross  amount 
of  duties. 


Country  stills      a 
Spirits  distilled 

Deduct  drawbacks 


Refined  sugar 

Deduct  drawbacks 


Retailers'  licenses     c 
Sales  at  auction 
Carriages    - 


-     139,839  15 
b      50,050  25 


65,240  88 
5,882  93. 


Gross  revenue  .... 

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Nett  revenue    -  -  -    • 


TEMPORARY. 


Stamps    d 


Expenses  of  collecting,  at  the  rate  of  4.91 
per  cent.  - 


Nett  revenue 


Total  nett  revenue 


372,561  30 

89,788  90 

59,357  95 

65,159  44 

51,650  41 

77,871  41 


716,389  41 
139,500  61 


220,702  70 
10,849  38 

Dolls. 


576,888  80 


209,853  32 


786,742  12 


a  Country  stills,  paying  yearly  duties  -  ..  ■ 

licenses  of  three  months  and  upwards 

do      under  three  months    - 
fragments  not  distinguishable 

Total 
b  Calculated  at  the  same  rate  as  in  the  year  1799. 


c  Retailers'  licenses — 


On  wine 
On  spirits 


Total 
d    The  last  quarter  for  Massachusetts  estimated, 

32 


Capacity 
of  Stills. 

Amount  of 
duty. 

Niimbev 
of  Stills. 

Gallons. 

246,844 

348,248 

1,239,279 

Dolk.    Cls. 

133,295  01 

106,689  37 

129,757  75 

2,819  17 

1,834,371 

372,561  30 

22,527 

Number. 

Ara't.  of  duty. 

3,450 
9,591 

13,041 

65,159  44 

244  REPORTS  OF  THE  fI8Gl 


ESTIMATE  of  the  Quantity  of  Public  Lands  within  the  Indian  boun- 
dary line,  North-  West  of  the  river  Ohio,  remaining  unsold  on  the  1st 
November,  1801. 

East  of  Sciota  river. 

Steubenville  district  contains,  estimated  acres     1,861,124.80 
Deduct,  viz: 
Sold  at  New  York  in   1787  95,613.76 

ft       Pittsburg  in  1797  31,432.26 

"       Land  Office,  Steubenville, 

to  this  clay   -  -  131,038.78 

granted  by   Congress  to  J.    H. 

Dorman         -         -  23,040.00 

311,124.80 

1,550,000.00 

Marietta  district  contains,  estimated  acres  1,303,841.75 

Deduct,  viz: 
Sold  at  New  York         -         -         19,349.75 
"     Pittsburg  -  -  10,573.85 

"     Land  Office,  Marietta  3,918.55 

33,842.15 

1,269,999.60 

Chillicothe  district  contains,  estimated  acres         2,090,402.72 
Deduct,  viz: 
Granted  to  settlers  at  Gallipolis       24,000.00 
"       to  Canada  and  Nova  Sco- 
tia refugees     -  -  43,040.00 
Sold  at  Land  Office,   Chillicothe  163,262.72 

230,302.72 


Military  tract  contains     -  2,539,110.00 

Deduct,  viz: 

Granted  to  UnitedBrethren  12,550.00 

Ebenezer  Zane's  location  539.70 

Military  locations  ascertained  1,034,556.70 

Ditto  estimated  11.473.60 


1,860,100.00 


1,059,120.00 

1,479,990.00 


Ohio  Company  reservation,  estimated  -  SO  000.00 


1801.1  SECRETARY  OF  THE  TREASURY.  045 

West  of  the  Virginia  Military  Lands. 

East  of  Great  Miami,  viz: 
Part  of  Ludlow's  survey,  not 

included  in  Symmes'  patent     232,268.00 
Reservations  in  Symmes'  patent 

estimated         -         -         -  27,732.00 

North  of  Ludlow's  survey  es- 
timated -  760,000.00 

1,020,000.00 

West  of  Great  Miama,  being  the 
surveyed  part  of  Cincinnati  dis- 
trict, contains  estimated  acres   2,070,426.40 

Deduct: 
Sold  at  Cincinnati  Land  Office         70,426.40 

2,000,000.00 

3.020,000.00 


Total  Acres  9,260,0S9.60 


246 


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253  REPORTS  OF  THE  [1802. 


REPORT  ON  THE  FINANCES. 

DECEEffBER,  1802. 


In  obedience  to  the  directions  of  the  act,  supplementary  to  the  act,  en- 
tled  "  An  act  to  establish  the  Treasury  Department,"  the  Secretary  of  the 
Treasury  respectfully  submits  the  following  report. 

The  permanent  revenues  of  the  United  States,  exclusively  of  fees,  fines  and 
penalties,  which,  in  a  general  view  of  the  subject  ma}^  be  omitted,  consist  of 
duties  on  merchandise  and  tonnage,  proceeds  of  the  sales  of  public  lands, 
and  duties  on  postage. 

The  duties  on  postage,  which  were,  in  the  annual  report  of  last  year,  esti- 
mated at  50,000  dollars,  have,  during  the  year,  ending  on  the  30th  day  of 
September  last,  yielded  50,500  dollars.  The  decrease  of  ship  letters,  the 
extension  of  the  establishment  through  unproductive  roads,  and  the  accele- 
ration of  the  progress  of  the  mail,  may,  however,  cause  some  defalcation  in 
the  receipts  of  the  ensuing  year. 

Three  hundred  and  twenty-six  thousand  and  fifty-two  dollars  and  eight 
cents  have  been  received,  during  the  same  year,  on  account  of  public  lands; 
of  which  sum,  17,162  dollars  and  50  cents  were  paid  in  the  Treasury,  in 
evidences  of  the  public  debt,  and  179,575  dollars  and  52  cents  in  specie; 
the  local  situation  of  the  Land  Offices,  not  having  yet  rendered  it  practicable 
to  draw  the  balance  from  the  Receivers  of  Public  Moneys. 

Three  hundred  and  forty  thousand  acres  of  land  have  been  sold  for  six 
hundred  and  eighty  thousand  dollars,  during  the  year  ending  on  the  31st  day 
of  October  last;  of  which  quantity  near  ninety-seven  thousand  acres  wTere 
sold  on  account  of  pre-emptions  claimed  by  purchasers  under  John  Cleve 
Symmes,  and  two  hundred  and  forty-three  thousand  acres  are  the  result  of 
current  sales.  The  annexed  statement  (A,)  designates  the  quantities  re- 
spectively sold  in  the  several  districts,  and  the  annual  payments  receivable 
on  account  of  the  balance  of  nine  hundred  and  sixty  thousand  dollars  due  on 
hese  and  the  preceding  sales. 

From  those  several  results  it  appears  probable  that  the  annual  receipts 
under  this  head  will  not,  on  an  average,  fall  short  of  the  sum  of  four  hundred 
thousand  dollars,  at  which  they  have  been  estimated. 

Although  it  had  been  anticipated  that  the  receipts  in  the  Treasury  on  ac- 
count of  duties  on  merchandise  and  tonnage,  could  not,  for  the  present  year, 
be  affected  by  the  restoration  of  peace  in  Europe;  yet  the  sum  actually  paid 
has  exceeded  the  most  sanguine  expectations.  Twelve  millions  two  hun- 
dred and  eighty  thousand  dollars  have  been  received  during  the  course  of 
the  ye^r  ending  on  the  30th  day  of  September  last;  a  sum  larger  by  two 
millions  of  dollars  than  the  amount  received  for  the  same  duties  during  the 
preceding,  or  any  other  year;  and  which  exceeds  by  twelve  hundred  thou- 
sand dollars,  the  aggregate  heretofore  collected  in  any  one  year,  on  account 
of  both  the  impost  and  the  internal  duties,  repealed  by  an  act  of  last  session^ 


1802.]  SECRETARY  OF  THE  TREASURY.  253 

This  excess,  which  had  not  been  calculated  upon,  is  considered,  alone,  as 
amply  sufficient  to  cover  any  possible  defalcation  which  might,  during  the 
next  and  ensuing  year,  reduce  that  branch  of  the  revenue  below  last  year's 
estimate,  of  nine  millions  five  hundred  thousand  dollars.  Such  defalcation 
is  not,  however,  apprehended;  for,  although  there  are  not  yet  sufficient  data 
precisely  to  ascertain  the  effect  of  peace,  on  the  amount  of  duties;  those  which 
are  in  the  possession  of  this  Department  tend  to  corroborate  the  presumption 
that  that  sum  at  least,  (nine  millions  and  a  half,)  will  hereafter  be  annually 
received.  The  statement  (B,)  which  exhibits  a  comparative  view  of  that 
revenue  for  each  quarter,  during  the  last  two  years,  shows  that  the  amount 
of  duties  accrued  during  the  nine  first  months  of  the  present  year,  exceeds 
eleven  millions  three  hundred  thousand  dollars;  and,  after  deducting  three 
millions  five  hundred  thousand  dollars,  amount  of  debentures  issued  during 
the  same  period  on  account  of  re-exportations  of  foreign  goods,  leaves  for 
those  three  quarters,  a  balance  of  more  than  seven  millions  eight  hundred 
thousand  dollars,  subject  to  no  other  deduction  but  the  expenses  of  collection; 
and  from  the  knowledge  already  obtained  of  the  importations,  during  the 
present  quarter,  as  well  as  from  the  gradual  diminution  of  re-exportations,  no 
doubt  remains  that  the  nett  revenue,  accruing  during  the  whole  year,  will 
exceed  the  estimate. 

From  present  appearances  the  whole  of  the  permanent  revenues  of  the 
United  States  may,  therefore,  be  reasonably  computed  at  ten  millions  of  dol- 
lars; of  which  sum,  seven  millions  three  hundred  thousand  dollars  are  ap- 
propriated for  the  payment  of  the  principal  and  interest  of  the  public  debt, 
and  two  millions  seven  hundred  thousand  dollars  are  applicable  to  the  current 
expenses  of  government. 

According  to  the  estimates  for  the  year  1803,  those  expenses  will,  exclu- 
sively of  a  sum  of  one  hundred  and  eighty  thousand  dollars,  wanted  to  cover 
the  Navy  deficiencies  of  the  years  1801  and  1802,  but  including  sundry 
permanent  appropriations  which  make  no  part  of  the  annual  estimates, 
amount  to  two  millions  six  hundred  and  sixty  thousand  dollars:  to  wit — 

For  the  Civil  Department,  and  ail  domestic  expenses  of  a  civil 
nature         -----__  $680,000 

For  expenses  attending  the  intercourse  with  foreign  nations, 
including  prize  causes  and  Barbary  powers  -  -  250,000 

For  the  Military  and  Indian  Departments  -  -  830,000 

For  the  Naval  establishment,  calculated  on  a  supposition  that 
six  frigates  shall  be  kept  in  constant  employment     -  -  900,000 


$2,660,000 


Neither  the  payments  due  on  account  of  the  convention  with  Great  Bri- 
tain, and  which  will,  for  three  years,  amount  annually  to  eight  hundred  and 
eighty-eight  thousand  dollars,  nor  the  instalments  and  interest  on  account  of 
the  200,000  dollars  loan  obtained  from  the  State  of  Maryland,  for  the  City  of 
Washington,  are  included  in  that  calculation,  as  they  may  be  defrayed  out  of 
the  following  resources,  which  make  no  part  of  the  permanent  revenues,  viz: 

1st.  The  surplus  of  specie  in  the  Treasury,  which,  as  the  whole  amount 
there  will  not  at  the  close  of  the  present  year  fall  much  short  of  five  mil- 
lions of  dollars,  far  exceeds  the  sum  which  it  is  prudent  to  keep. 

2dly.  The  uncollected  arrears  of  the  direct  tax,  estimated  at  four  hundred 
thousand  dollars.     And, 


$54  REPORTS  OF  THE  [1802. 

3dly.  The  outstanding  uncollected  internal  duties,  amounting  to  near  seven 
hundred  thousand  dollars. 

The  only  embarrassment  experienced  during  the  course  of  last  year,  arose 
from  the  difficulty  of  procuring  the  remittances  necessary  to  meet  the  large 
instalments  of  the  debt  due  in  Holland.  The  impossibility  of  obtaining 
bills  on  that  country,  to  the  amount  wanted  by  government,  and  the  loss 
which,  on  account  of  the  rate  of  exchange,  must  be  incurred  by  remitting 
circuitously  through  England,  induced  the  Secretary  of  the  Treasury  to  re- 
commend, in  a  report  to  the  Commissioners  of  the  Sinking  Fund,  (marked 
C,)  a  recourse  to  bank  stock,  as  the  most  favorable  mode  of  remitting. 

Of  the  five  thousand  shares  in  the  stock  of  the  Bank  of  the  United  States., 
originally  subscribed  hy  the  United  States,  2,7S0  shares  had  been  sold 
in  1796,  by  virtue  of  the  act,  entituled  "An  act  making  provision  for  the 
payment  of  certain  debts  of  the  United  States,"  and  for  the  purpose  of 
discharging  a  part  of  the  debt  clue  to  the  bank.  The  remaining  2,220 
shares  were  now,  under  the  same  authority,  sold  at  45  per  cent,  ad- 
vance. The  1,287,600  dollars  which  they  produced,  were,  in  conformity 
to  the  provisions  of  the  said  act,  applied  towards  discharging  an  equal 
amount  of  that  part  of  the  debt  which  had  become  due  to  the  bank  before  or 
during  the  year  1796;  and  the  purchaser  of  the  stock  sold,  at  the  same  time, 
to  the  Treasury,  an  equal  sum  in  bills  on  Holland,  at  41  cents  per  guilder, 
the  securing  of  which  large  amount,  at  that  rate,  was  the  inducement,  on  the 
part  of  government,  to  dispose  of  the  bank  stock  on  those  terms.  As  the 
dividend  usually  received  on  the  bank  stock  sold,  and  the  annual  interest 
payable  on  the  debt  due  to  the  bank,  thus  extinguished,  were  nearly  equal, 
the  July  half  yearly  dividend  on  the  stock  was,  in  fact,  the  premium  paid 
for  the  purpose  of  effecting  the  remittance  ;  and  government  has  thereby 
been  enabled  to  obtain,  without  raising  the  price  of  exchange,  the  whole 
amount  wanted  to  meet  the  payments  due  in  Holland,  till  the  month  of  Sep- 
tember, 1803. 

Exclusively  of,  and  in  addition  to,  the  debt  of  1,287,600  dollars  thus  paid 
to  the  bank  out  of  the  proceeds  of  the  sales  of  bank  shares,  a  sum  of  eight 
millions  three  hundred  and  thirty-four  thousand  seven  hundred  and  fifty-se- 
ven dollars  and  eighty-nine  cents,  has  been  paid  out  of  the  Treasury  during 
the  year,  ending  on  the  30th  day  of  September  last,  on  account  of  the  princi- 
pal and  interest  of  the  public  debt;  and  the  payments  in  part  of  the  principal 
of  the  debt  made  during  the  same  period,  have  been  as  followeth: 

1st.   The  payments  on  account  of  the  principal  and  interest 

of  the  domestic  debt,  have  been  -  -  -  -   §4,628,105  39 

From  which  deducting  one  year's  interest  on  the  same       -      3,470,259  75 


Leaves  a  sum,  applied  to  the  reimbursement  of  the  principal 

of  the  6  per  cent,  and  deferred  stocks,  of  -  -  -      1,157,845  64 

'2d.   Paid  to  foreign  officers,  and  for  the  registered  debt       -  9,603   18 

3d.   Principal  of  domestic  loans  (exclusively  of  the  1,287,600 

dollars  paid  out  of  the  proceeds  of  bank  shares)  -  -         202,400  00 

4th.   Evidences  of  public  debt  paid  for  lands  -  -  17,162  5© 

5th.  The  payments  on  account,  of  the  princi- 
pal and  interest  of  the  foreign  debt,  have 
been  -  3,310,874  32 

From  which  sum  deducting  one 
year's  interest  and  charges, 
equal  to  -  462,731  00 


1802.]  SECRETARY  OF  THE  TREASURY.  255 


And,  on  account  of  the  different 
rates  at  which  bills  have  been 
purchased,  and  of  sundry  bills 
returned  for  non-payment,  and 
now  in  suit,  a  further  sum 
of       -  -  -  -    82,284  9S 


545,015  98 


Leaves  applicable  to  payment  of  the  principal  -  -      2,765,858  34 

4,152,869  66 
Amounting  altogether  to  four  millions  one  hundred  and 
fifty-two  thousand  eight  hundred  and  sixty-nine  dollars 
and  sixty-six  cents.    And  if  to  that  sum  shall  be  added  the      1,287,600  00 

paid  on  account  of  the  principal  of  the  debt  due  to  the 
bank,  out  of  the  proceeds  of  the  sale  of  the  bank  shares, 
the  total  amount  of  debt  extinguished  during  that  year, 
will  be  found  to  exceed  five  millions  four  hundred  and 
forty  thousand  dollars     -----      5,440,469  66 


The  balance  of  specie  in  the  Treasury,  which  on  the  first  day  of  October, 
1801,  amounted  to  2,94S,718  dollars,  and  73  cents;  hadencreased  on  the  first 
October,  1802,  to  the  sum  of  4,539,675  dollars,  and  57  cents;  making  a  dif- 
ference in  favor  of  the  Treasury,  of  1,590,956  dollars,  and  84  cents,  which 
last  sum  added  to  the  above-mentioned  payment  of  4,152,869  dollars  and 
66  cents — made  out  of  the  Treasury,  on  account  of  the  principal  of  the  pub- 
lic debt;  makes  an  actual  difference  in  favor  of  the  United  States,  of  more 
than  five  millions  seven  hundred  and  forty  thousand  dollars,  during  that 
year. 

The  payments  on  account  of  the  principal  of  the  public  debt,  from  the  1st 
day  of  April,  1801,  to  the  30th  day  of  September,  1S02,  (exclusively  of,  and 
in  addition  to  the  bank  debt,  discharged  out  of  the  proceeds  of  bank  shares,) 
amounts  to,  -  -  -  -  -  -  $  5,339,886  44 

Viz:  

On  account  of  the  domestic  debt         -     $  1,334,942  81 
On  account  of  the  foreign  debt,  -        3,302  543  63 

And  in  repayment  of  temporary  loans,         702,400  00 


$5,339,8S6  44 
And  if  to  that  sum  shall  be  added  the  increase  of  specie  in 
the    Treasury   during  the   same    period,  which,    (as  the 
amount  on  the   1st  April,  1801,  did  not  exceed  1,794,044 
dollars  and  85  cents,)  amounts  to  -  -  ,  -  -      2,745,630  72 


The  difference  in  favor  of  the  United  States,  for  those 
eighteen  months,  will  be  found  equal  to  eight  millions, 
eighty-five  thousand  and  five  hundred  and  seventeen  dollars 
and  sixteen  cents.  -  -  -  -  $8,085,517  16 


Of  the  annual  appropriation  of  7,300,000  dollars,  for  the  principal  and  in- 
terest of  the  public  debt,  near  three  millions  nine  hundred  thousand  dollars 
will  be  wanted  to  pay  the  interest  which  falls  due  in  the  year  1803,  and  the 


256  REPORTS  OF  THE  [  1802. 

residue,  amounting  to  three  millions  four  hundred  thousand  dollars,  may  be 
considered  as  the  sum  applicable,  during  that  year,  to  the  extinguishment  of 
the  principal  of  the  debt. 

From  all  which  it  results,  that  so  long  as  the  United  States  shall  not  be  af- 
flicted by  any  unforeseen  calamity,  and  whilst  the  public  expenditures  shall 
be  kept  within  their  present  limits,  there  does  not  appear  any  necessity  for 
increasing  the  public  revenues. 

All  which  is  most  respectfully  submitted,  by 

ALBERT  GALLATIN, 

Secretary  of  the  Treasury. 

Treasury  Department,  December  16th,  1802. 


SECRETARY  OF  THE  TREASURY. 


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260  REPORTS  OF  THE  [1802. 

C. 

At  a  meeting  of  the  Commissioners  of  the  Sinking  Fund,  on  the  7th  of 
June,  1802: 

Present — The  Secretary  of  State, 

The  Secretary  of  the  Treasury, 

The  Attorney  General  of  the  United  States. 

The  Secretary  of  the  Treasury  reported  to  the  Board,  that  provision  has 
already  been  made,  to  meet  nearly  all  the  demands  which  will  become  due 
in  Holland,  during  the  course  of  the  present  year;  but,  that  it  is  necessary  to 
make  immediate  provision  for  the  payments  on  account  of  principal  and  in- 
terest, which  fall  due  there,  during  the  first  five  months  of  the  year  1803, 
and  amounting  to  four  millions  four  hundred  and  thirty-nine  thousand  eight 
hundred  and  thirty  guilders,  and  payable  at  the  following  periods,  viz: 

1st  of  January,  -  -  -  872,700  guilders. 

1st  of  February,  -  -             -  986,350          " 

1st  of  March,  -  ■         -  -  601,000          " 

1st  of  June,  -  -  -  1,979,780          " 

That  from  the  great  diminution  of  trade,  between  this  country  and  Hol- 
land, he  has  ascertained  during  his  late  excursion  to  New  York  and  Philadel- 
phia, that  it  is  impracticable  to  obtain  bills  on  Holland,  to  that  amount;  that 
the  rate  of  exchange  is  already  forty-one  cents  per  guilder,  and  that  any 
attempt  on  the  part  of  the  government,  to  procure  the  large  amount  now 
wanted,  would  indubitably  raise,  considerably,  the  rate  of  exchange: 

That  if  it  shall  be  attempted  to  remit,  by  the  way  of  England,  the  loss  will 
be  also  considerable;  the  present  rate  of  exchange  with  that  country  being 
now  above  par,  and  raising,  and  would  indubitably  be  enhanced,  should  gov- 
ernment come  into  the  market  for  large  purchases;  and  the  rate  of  exchange 
between  England  and  Holland,  being,  by  the  last  advices,  ten  guilders  eight 
Stivers  per  pound  stsrling,  nor  likely  to  become  more  favorable,  which,  sup- 
posing the  whole  amount  in  bills  on  England  to  be  procurable,  (which  is  not 
believed  to  be  the  fact,)  at  16S,  would,  including  the  commission  of  one  per 
cent,  in  England,  amount  to  forty-three  and  a  half  cents  per  guilder: 

That  the  Bank  of  the  United  States  having  been  applied  to,  has  refused 
to  undertake  to  contract  for  making  the  necessary  remittance;  and  that  the 
two  only  considerable  offers  made  to  the  Secretary,  are  now  submitted  to 
the  Board,  viz: 

The  Manhattan  Company  offer  to  remit  the  whole,  at  the  rate  of  forty- 
three  cents  per  guilder. 

Alexander  Baring  offers  to  remit  guilders  3,140,487  16£,  payable  in 
Amsterdam,  at  the  following  dates,  viz: 

1st  of  January,  1803,  -             -             -  605,000        guilders. 

1st  of  February,           ...  685,000             do. 

1st  of  March,      -                                    -  425,000             do. 

1st  June,         -  1,425,487  16|     do. 

and,  at  the  rate  of  forty-one  cents  per  guilder:  provided,  however,  that  the 
United  States  shall  sell  to  him  the  two  thousand  two  hundred  and  twenty 
shares  of  the  Bank  of  the  United  States,  owned  by  the  United  States,  at 
forty-five  per  cent,  advance,  or  at  the  rate  of  five  hundred  and  eighty  dollars 
per  share;  which  last  proposition  is  recommended  by  the  Secretary  of  the 
Treasury  as  the  most  eligible;  as,  exclusively  of  the  advantageous  rate  of  ex- 


1802.1  SECRETARY  OF  THE  TREASURY.  261 

change  thereby  secured,  the  transaction  will  not  have  any  unfavorable  effect 
on  the  rate  of  exchange  generally,  and  by  so  considerably  diminishing  the 
demand,  will  enable  the  United  States  to  obtain  what  is  still  wanted,  at  a  rea- 
sonable rate;  and  because,  in  his  opinion,  the  price  obtained  for  the  Bank 
shares,  is  more  than  could  be  obtained  were  they  thrown  in  the  market  for 
sale,  and  more  than  their  intrinsic  value.     Whereupon,  it  was 

Resolved,  by  the  Board,  "That  the  Secretary  of  the  Treasury  be  authorized 
to  sell  the  shares  of  the  stock  of  the  Bank  of  the  United  States  belonging  to 
the  United  States,  and  that  the  proceeds  thereof  be  applied  to  the  payment 
of  the  capital  or  principal  of  any  part  of  the  debt  of  the  United  States,  which 
had  become  due  to  the  Bank  of  the  United  States,  before,  or  during  the  course 
of  the  year  1796,  and  which  remains  still  unpaid,  in  conformity  to  the  pro- 
visions of  the  act  entitled  "  An  act  making  provision  for  the  payment  of  cer- 
tain debts  of  the  United  States,"  passed  on  the  31st  day  of  May,  1796. 
(Signed) 

JAMES  MADISON,  Secretary  of  State. 
ALBERT  GALLATIN,  Secretary  of  the  Treasury, 
LEVI  LINCOLN,  Attorney  General. 
Attest: 

Edward  Jones,  Secretary  of  the  Board  of 

Commissioners  of  Sinking  Fund. 


262  REPORTS  OF  THE  £1803, 

REPORT  ON  THE  FINANCES. 

OCTOBER,  1803. 


In  obedience  to  the  directions  of  the  act,  supplementary  to  the  act,  enti- 
tled "An  act  to  establish  the  Treasury  Department,"  the  Secretary  of  the 
Treasury  respectfully  submits  the  following  report  and  estimates. 

The  annualTTett  proceeds  of  the  duties  on  merchandise  and  tonnage,  had, 
in  former  reports,  been  estimated  at  nine  millions  five  hundred  thousand 
dollars.  That  estimated  revenue,  predicated  on  the  importations  of  the 
years  immediately  preceding  the  late  European  war,  and  on  the  ascertained 
ratio  of  increase  of  the  population  of  the  United  States,  appears,  from  the 
experience  of  the  two  last  years,  to  have  been  underrated.  The  nett  reve- 
nue arising  from  that  source,  which  accrued  during  the  year  1802,  exceeds 
ten  millions  one  hundred  thousand  dollars.  The  revenue  which  has  accrued 
during  the  two  first  quarters  of  the  present  year,  appears,  from  the  best  esti- 
mate that  can  now  be  formed,  to  have  been  only  fifty  thousand  dollars  less 
than  that  of  the  two  corresponding  quarters  of  the  year  1802;  and  the  re- 
ceipts in  the  Treasury,  on  account  of  the  same  duties,  during  the  year  end- 
ing the  30th  of  September  last,  have  exceeded  ten  millions  six  hundred  thou- 
sand dollars.  Those  facts  afford  satisfactory  evidence  that  the  wealth  of 
the  United  States  increases  in  a  still  greater  ratio  than  their  population,  and 
induce  a  belief  that  this  branch  of  the  public  revenue  may  now  be  safely  cal- 
culated at  ten  millions  of  dollars. 

From  the  statement  (A,)  it  will  appear,  that  the  same  revenue  for  the 
two  last  years  of  the  late  European  war,  (1S00  and  1801,)  calculated  at  the  pre- 
sent rate  of  duties,  averaged  11,600,000  dollars  a  year;  but,  although  it 
might,  with  some  degree  of  probability,  be  supposed  that  the  renewal  of 
hostilities  will  again  produce  a  similar  increase, no  inference  from  that  period 
is  drawn  in  this  report,  in  relation  to  the  revenue  of  the  ensuing  years. 

The  statement  (B,)  shows  the  several  species  of  merchandise  on  which 
the  duties  on  importations  were  collected,  during  the  year  1S02,  the  por- 
tion of  that  revenue  which  was  derived  from  drawbacks,  and  that  which 
arose  from  the  extra  duty  on  merchandise  imported  in  foreign  vessels. 

Although  the  sales  of  the  public  lands,  during  the  year  ending  on  the  30th 
day  of  September  last,  were  affected  by  the  situation  of  the  western  country, 
two  hundred  thousand  acres  have  been  sold  during  that  period;  and,  as  it 
appears  by  the  statement  (C,)  that,  independent  of  future  sales,  the  sums  al- 
ready paid  to  the  Receivers,  together  with  those  which,  exclusively  of  in- 
terest, fall  due  during  the  three  ensuing  years,  amount  to  1,250,000  dollars, 
the  annual  revenue  arising  from  the  proceeds  of  those  sales,  cannot  be  esti- 
mated at  less  than  four  hundred  thousand  dollars. 

The  extension  of  post  roads,  and  the  acceleration  of  the  mail,  whilst 
diffusing  and  increasing  the  benefits  of  the  institution,  have,  as  an  object  of 
revenue,  rendered  it  less  productive.  The  receipts  from  that  source  have 
amounted,  during  last  year,  to  27,000  dollars;  but,   as  neither  these,  nor 


1803.] 


SECRETARY  OF  THE  TREASURY.  ggg 


those  arising  from  some  other  smaller   incidental  branches,  are  of  sufficient 
importance  to  affect  any  general  result,  the  whole  existing   revenue  of  the 
United  States  will  be   computed  at  only  ten  millions  four  hundred  thou- 
sand dollars. 

The  permanent  annual  expenses  of  government,  which,  under  existing 
laws,  must  be  defrayed  out  of  that  revenue,  amount  to  nine  millions  eight 
hundred  thousand  dollars,  to  wit: 

1st.   The  annual  appropriation  of  7,300,000  dollars,  for  the  pay- 
ment of  the  principal  and  interest  of  the  debt;  of  which  about 
three  millions  and  a  half  are  at  present  applicable  to  the  dis- 
charge of  the  principal,  and  the  residue  to  the  payment  of  in- 
terest -  -  -  -  -  -  -  $7,300,009 

2d.   The  current  expenses  of  government,  which,  ac- 
cording to  the  estimates  for  the  year  1804,  consist  of 
the  following  items,  viz: 
For  the  Civil  Department,  and  all  domestic  expenses 

of  a  civil  nature  -  -  -  -         791,000 

■  For  expenses  attending  the  intercourse  with  foreign 
nations,  including  the  permanent  appropriation  for 
Algiers,  and  all  other  expenses  relative  to  the  Bar- 
bary  powers    -----         184,000 

For  the  Military  and  Indian  Departments  -         875,000 

For  the  Naval  Establishment,  calculated  on  the  sup- 
position that  two  frigates  and  four  smaller  vessels 
shall  be  kept  in  commission    -  650,000 


2,500,000 

9,800,000 
And  deducted  from  the  permanent  revenue  of         -  -         10,400,000 


Leave  a  surplus  revenue  of  six  hundred  thousand  dol- 
lars applicable  to  other  objects.   -  -  -  -  $600,000 


The  following  extraordinary  resources  and  demands,  not  being  of  a  perma- 
nent nature,  are  not  included  in  that  calculation,  to  wit: 
The  specie  in  the  Treasury,  which,  on  the  30th  day  of  Septem- 
ber last,  amounted  to  -  5,860,000 
The  arrears  of  the  direct  tax,  estimated  at          -             -            ,  -        250,000 
The  outstanding  internal  duties  amounting  to  near,        -             -,        400,000 
And  the  sum  which  will  be  repaid  to  the  United  States  on  ac- 
count of  advances  heretofore  made  in  England  for  the  prose- 
cution of  claims,  estimated  at                                                    -        150,000 


;,660,000 


Constituting  an  aggregate  of  more  than  six  millions  six  hundred 
thousand  dollars,  which,  after  reserving  the  sum  which  it  is 
necessary  to  keep  in  the  Treasury,  will  be  sufficient  to  dis- 
charge the  demands  due  on  account  of  the  convention  with 
Great  Britain,  and  amounting  to        -  -  -  -  $2,664,000 

Sundry  extraordinary  expenses  in  relation  to  the  conventions 

with  France  and  Great  Britain,  estimated  at  -  -  -        100,000 


£64  REPORTS  OF  THE  [1803. 

The  loan  obtained  from  the   State  of  Maryland  for  the   City 

of  Washington,  amounting  to  -  -  -  -        200,000 

And  also  to  pay  two  millions  of  dollars  -  -  -     2,000,000 

on  account  of  the  purchase  of  Louisiana;  being  the  same  sum 

which  was  reserved  for  the  purposes  contemplated  by  the  law  of    4,964,000 
the  last  session,  appropriating  that  amount  for  the  extraordinary     -  ■ 
expenses  attending  the  intercourse  with  foreign  nations. 
It  appears  by  the  estimate  (D,)  that  during  the  year  ending  on 
the  30th  September  last,  the  payments  from  the  Treasury,  on 
account  of  the  public  debt,  have  amounted  to  -  -    3,096,700 

Which,  together  with  the  increase  of  specie  in  the  Treasury, 

during  the  same  period,  amounting  to  -  1,320,000 


Makes  an  actual  difference  in  favor  of  the  United  States,  of 
more  than  four  millions  four  hundred  thousand  dollars  during 
that  year.      -  -  -  -  -  -  _      4,416700 

The  payments  on  account  of  the  principal  of  the  public  debt, 
from  the  1st  day  of  April,  1801,  to  the  30th  day  of  September, 
1803,  have  amounted,  as  appears  by  the  estimate  (E,)  to       -  $9,924,004 

The  specie  in  the  Treasury,  on  the  1st  day  of  April, 

1801,  amounted  to  -  -  -    1,794,000 

And  on  the  30th  day  of  September,  1803,  to  -    5,860,000 

Making  an  increase  of  -  -  -  -  4,066,000 


Those  two  items  constitute  an  aggregate  of  13,990,004 

From  which,  deducting  the  extraordinary  resource  arising  from 

the  sales  of  the  bank  shares,  which  produced       -  -  1,287,600 


Leaves  for  the  amount  of  the  true  difference  -  -  12,702,404 


In  favor  of  the  United  States,  for  that  period  of  two  years  and  a  halt,  a 
sum  of  twelve  millions  seven  hundred  thousand  dollars. 

From  that  view  of  the  present  situation  of  the  financial  concerns  of  the 
United  States,  it  seems  that  the  only  question  which  requires  consideration, 
is,  whether  any  additional  revenues  are  wanted  in  order  to  provide  for  the 
new  debt,  which,  if  Congress  shall  pass  the  laws  neeessary  to  carry  the  treaty 
with  France  into  effect,  will  result  from  the  purchase  of  Louisiana. 

The  sum  which  the  United  States  may  have  to  pay  by  virtue  of  that  trea- 
ty, amounts  to  fifteen  millions  of  dollars,  and  consists  of  two  items:  1st, 
11,250,000  dollars  payable  to  the  government  of  France,  or  to  its  assignees, 
in  a  stock  bearing  an  interest  of  six  per  cent.,  payable  in  Europe,  and  the  prin- 
cipal of  which  will  be  discharged  at  the  Treasury  of  the  United  States,  in 
four  instalments,  the  first  of  which  shall  commence  in  the  year  1818.  2dly, 
A  sum  which  cannot  exceed,  but  may  fall  short  of,  3,750,000  dollars,  paya- 
ble in  specie  at  the  Treasury  of  the  United  States,  during  the  course  of  the 
ensuing  year,  to  American  citizens  having  claims  of  a  certain  description  on 
the  government  of  France. 

It  has  already  been  stated  that  two  millions  of  dollars  may  be  paid  from 
the  specie  now  in  the  Treasury,  on  account  of  the  last  item;  and  the  whole 
amount  of  the  new  debt  which  may  eventually  be  created,  cannot,  therefore, 
exceed  thirteen  millions  of  dollars,,  the  annual  interest  of  which  is  equal  to 


1803.1  SECRETARY  OF  THE  TREASURY.  qc}5 

780,000  dollars;  but,  on  account  of  commissions  and  variations  of  exchange, 
will  be  estimated  at  eight  hundred  thousand  dollars. 

The  existing  surplus  revenue  of  the  United  States  will,  as  has  been  stated, 
be  sufficient  to  discharge  six  hundred  thousand  dollars  of  that  sum;  and  it  is 
expected  that  the  nett  revenue  collected  at  New  Orleans  will  be  equal  to  the 
remaining  two  hundred  thousand  dollars.  That  opinion  rests  on  the  suppo- 
sition that  Congress  shall  place  that  port  on  the  same  footing  as  those  of  the 
United  States,  so  that  the  same  duties  shall  be  collected  there,  on  the  import- 
ation of  foreign  merchandise,  as  are  now,  by  law,  levied  in  the  United 
States,  and  that  no  duties  shall  be  collected,  either  on  the  exportation  of 
produce  or  merchandise,  from  New  Orleans  to  any  other  place;  nor  on  any 
articles  imported  in  the  United  States  from  the  ceded  territories,  or  into  those 
territories,  from  the  United  States. 

The  statements  F,  G,  H,  exhibit  the  annual  exports  and  imports  of  the 
United  States,  to  and  from  Florida  and  Louisiana,  for  the  years  1799  to 
1802;  and  the  statement  (G,)  particularly  shows,  that  the  exportations 
from  the  Atlantic  States  to  those  colonies,  of  articles,  not  of  the  growth, 
produce,  or  manufacture  of  the  United  States,  amounted  for  the  three  years,. 
1799,  1800,  and  1801,  to  6,622,1S9  dollars,  making  an  average  of  more  than 
two  millions  two  hundred  thousand  dollars  of  foreign  articles  liable  to  pay 
duty,  annually  imported  into  Florida  and  Louisiana  from  the  United  States 
alone. 

It  is  ascertained  that  the  exportations  from  the  United  States  to  Florida 
are  so  trifling,  that,  that  statement  may  be  considered  as  applying  solely  to 
New  Orleans;  and  it  is  also  known,  that  almost  the  whole  of  those  importa- 
tions were  consumed  within  that  colony;  and  that,  during  the  war,  the  sup- 
plies from  the  United  States  constituted  by  far  the  greater  part  of  its  im- 
ports. 

From  thence  it  results^  that  the  annual  importations  into  the  ceded  territo- 
ry, of  articles  destined  for  the  consumption  of  its  own  inhabitants,  and 
which  will,  under  the  revenue  laws  of  the  United  States,  be  liable  to  pay 
duty,  may  safely  be  estimated  at  two  millions  five  hundred  thousand  dollars; 
an  amount  which,  at  the  present  rate  of  duties,  will  yield  a  revenue  of  about 
350,000  dollars. 

From  that  revenue  must  be  deducted  150,000  dollars,  for  the  following 
items,  viz: 

1st.  The  amount  of  duties  on  a  quantity  of  sugar  and  indigo,  equal  to  that 
whieh  shall  be  imported  from  New  Orleans  to  the  United  States,  as  those  ar- 
ticles, being  imported  free  from  duty,  will  diminish  by  so  much  the  revenue 
now  collected  in  the  seaports  of  the  United  States.  The  whole  amount  of 
sugar  exported  from  New  Orleans  is  less  than  4,000,000  of  pounds,  and 
that  of  indigo  is  stated  at  about  30,000  pounds.  Supposing,  (which,  on  ac- 
count of  that  exemption,  is  not  improbable,)  that  the  whole  of  those  articles 
should  hereafter  be  exported  to  the  United  States,  the  loss  to  the  revenue 
will  be  about  100,000  dollars. 

2d.  No  increase  of  expense  in  the  military  establishment  of  the  United 
States  is  contemplated  on  account  of  the  acquisilion  of  territory;  but  the 
expenses  of  the  civil  administration  of  the  province,  and  those  incident  to  the 
intercourse  with  the  Indians,  are  estimated  at  50,000  dollars:  leaving  for  the 
nett  revenue  derived  from  the  province,  and  applicable  to  the  payment  of  the 
interest  of  the  new  debt,  200,000  dollars,  as  above  stated.  The  only  provi- 
sions, which,  if  that  view  of  the  subject  be  correct,  appear  necessary,  and  are 


26G  REPORTS  OF  THE  [1803. 

respectfully  submitted,  are,  1st,  In  relation  to  the  stock  of  11,250,000  dollars, 
to  be  created  in  favor  of  the  government  of  France,  or  of  its  assignees. 

That  that  debt  be  made  a  charge  on  the  sinking  fund,  directing  the  Com- 
missioners of  the  fund  to  apphr  so  much  of  its  proceeds  as  may  be  necessary 
for  the  payment  of  interest,  and  reimbursement  or  redemption  of  the  princi- 
pal, in  the  same  manner  as,  by  the  existing  laws,  they  are  directed  to  do 
in  relation  to  the  payment  of  interest  and  discharge  of  the  principal  of  the 
debt  now  charged  on  that  fund. 

That  so  much  of  the  duties  on  merchandise  and  tonnage  as  will  be  equal 
to  seven  hundred  thousand  dollars,  being  the  sum  wanted  to  pay  the  inter- 
est of  that  new  stock,  be  added  to  the  annual  permanent  appropriation  for 
the  sinking  fund,  making,  together  with  the  existing  appropriation,  eight 
millions  of  dollars,  annually  applicable  to  the  payment  of  the  interest  and 
principal  of  the-public  debt. 

And  that  the  said  annual  sum  of  eight  millions  of  dollars,  remain  thus 
pledged.,  and  be  vested  in  the  Commissioners  of  the  Sinking  Fund,  in  trust  for 
the  said  payments,  until  the  whole  of  the  existing  debt  of  the  United  States 
and  of  the  new  stock  shall  have  been  reimbursed  or  redeemed. 

As  a  sum  equal  to  the  interest  accruing  on  the  new  stock,  will  thus  be 
added  to  the  sinking  fund,  the  operation  of  that  fund,  as  it  relates  to  the  ex- 
tinguishment of  the  existing  debt,  will  remain  precisely  on  the  same  footing 
as  has  been  heretofore  provided  by  Congress.  The  new  debt  will  neither 
impede  or  retard  the  payment  of  the  principal  of  the  old  debt;  and  the  fund 
will  be  sufficient,  besides  paying  the  interest  on  both,  to  discharge  the  principal 
of  the  old  debt  before  the  year  IS  18,  and  that  of  the  new  within  one  year 
and  a  half  after  that  year. 

2d.  In  relation  to  the  American  claims,  the  payment  of  which  is  assumed 
by  the  convention  with  France: 

That  a  sum  not  exceeding  3,750,000  dollars,  inclusive  of  the  two  millions 
appropriated  by  a  law  of  tbe  last  session  of  Congress,  for  defraying  the  ex- 
traordinary expenses  incident  to  the  intercourse  with  foreign  nations,  be  ap- 
propriated for  the  payment  of  those  claims,  to  be  paid  out  of  any  moneys  in 
the  Treasury  not  otherwise  appropriated. 

That,  for  the  purpose  of  effecting  the  whole  of  that  payment,  the  President 
Pof  the  United  States  be  authorized  to  borrow  a  sum  not  exceeding  1,750,000 
dollars,  at  an  interest  not  exceeding  six  per  cent,  a  year. 

And,  that  so  much  of  the  proceeds  of  the  duties  on  merchandise  and  ton- 
nage, as  may  be  necessary,  be  appropriated  for  the  payment  of  the  interest, 
;and  for  the  reimbursement  of  the  principal  of  the  loan,  which  may  eventually 
be  effected  by  virtue  of  the  preceding  provision. 

It  is  not  proposed  to  charge  that  loan  on  the  sinking  fund,  because  its 
amount,  in  case  it  shall  be  effected,  cannot  at  present  be  ascertained;  and,  be- 
cause it  may,  perhaps,  under  the  then  existing  circumstances  of  the  Treasury, 
be  found  more  expedient  not  to  borrow  the  money,  and  in  lieu  of  it,  to  pay 
out  of  the  sinking  fund,  the  whole,  or  a  part  of  the  two  last  instalments,  pay- 
able by  virtue  of  the  convention  with  Great  Britain,  as  authorized  by  the  act 
making  provision  for  the  payment  of  the  whole  of  the  public  debt. 

It  is  evident  that  the  possibility  of  thus  providing  for  the  payment  of  the 
interest  of  a  new  debt  of  thirteen  millions  of  dollars,  without  either  recur- 
ring to  new  taxes,  or  interfering  with  the  provisions  heretofore  made  for  the 
payment  of  the  existing  debt,  depends  on  the  correctness  of  the  estimate  of 
the  public  revenue  which  has  been  submitted.     Although  it  is  not  without. 


1803.]  SECRETARY  OF  THE  TREASURY.  £67 

diffidence  that  the  hope  of  such  favorable  result  is  entertained,  some  reliance 
is  placed  on  the  solidity  of  the  basis  on  which  the  estimate  is  grounded.  It 
rests  principally  on  the  expectation  that  the  revenue  of  the  ensuing  year 
shall  not  be  less  than  that  which  accrued  during  the  year  1802.  No  part  of 
it  depends  on  the  probable  increase  which  may  result  from  the  neutrality  of 
the  United  States  during  the  continuance  of  the  war  in  Europe,  nor  even  on 
the  progressive  augmentation,  which,  from  past  experience,  may  naturally 
be  expected  to  arise  from  the  gradual  increase  of  population  and  wealth. 
Nor  has  that  effect  been  taken  in  consideration,  which  the  uninterrupted  free 
navigation  of  the  Mississippi,  and  the  acquisition  of  New  Orleans,  may  have, 
either  on  the  sales  of  the  public  lands,  or  on  the  general  resources  of  the 
inhabitants  of  the  western  States. 

All  which  is  respectfully  submitted. 

ALBERT  GALLATIN, 

Secretary  of  the  Treasury. 


35 


268 


REPORTS  OF  THE 


[1803. 


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1S03.] 


SECRETARY  OF  THE  TREASURY. 


269 


STATEMENT  A— Continued. 

*3  STATEMENT  of  the  amount  of  American  and  Foreign  Tonnage, 
respective/!/  employed  in  Joreign  trade,  for  each  of  the  years  1800, 
1801,  and  1802,  as  taken  from  the  records  of  the  Treasury. 


Proportion  of 

Total  amount  of  tonnage 

foreign     ton- 

employed in  the  foreign 

nage   to    the 

Years. 

American  tonnage 

Foreign  ton- 

trade of   the  United 

whole  am't  of 
tonnage    em- 

in foreign  trade. 

nage. 

ployed  in  the 
foreign  trade 
of  the  United 

States. 

1800 

$  682,871 

$  123,882 

$    806.753 

15.4*0  100 

1801 

849,302 

158,365 

1,007,667 

15.7  to  100 

1802 

787,301 

143,366 

930,667 

15.4  to  100 

Treasury  Department, 

Register's  Office,  October  24,  1803. 

JOSEPH  JNOURSE,  Register. 


276  REPORTS  OF  THE  [1803. 


B. 

Jl  STATEMENT  exhibiting  the  value  and  quantities,  respectively, 
of  Merchandise,  on  which  duties  actually  accrued,  during  the  year 
1802,  {consisting  of  the  difference  between  articles  paying  duty,  im- 
ported, and  those  entitled  to  drawback,  re-exported,)  and,  also,  of  the 
nett  revenue  which  accrued  during  that  year,  front  duties  on  merchan- 
dise, tonnage,  passports,  and  clearances. 


Goods  paying  duties  ad  valorem,  viz: 

g  23,377,717,  at  12^  per  cent.  g  2,922,214  62 

7,888^614,        15          do  1,183,292   10 

439,830,        20          do  87,966  00 


31,706,161  4,193,472   72 

a  Spirits,  7,720,232  galls,  at  29.2  cts.  av.  2,253,496   17 

b  Sugar,  39,443,814  lbs.          2h       do  975,755  61 

Salt,        3,244,309  bushels,  20  648,861   80 

c  Wines,    1,912,274  galls.       33.9  av.  683,816  72 

d  Teas,       2,406,938  lbs.          15.9  av.  382,699  00 

Coffee,    6,724,220  lbs.            5  336,21100 

Molasses,  6,317,969  galls.      5  315,898  45 

e  All  other  articles,          -  286,533  00 


10,076,744  47 
Deduct  amount  of  duties  refunded,  13,331   99 


10,063,412  48 

f   Three  and  a  half  per  cent,  retained  on  drawbacks  153,275  45 
Extra  duty  of  10  per  cent,  on  merchandise  imported  in 

foreign  vessels     -----  180,088  00 


Nett  amount  of  duties  on  merchandise  -        10,396,775  93 

Duties  on  tonnage       -  -  -  -  160,424  70 

Duties  on  passports  and  clearances       -  -  13,862  00 


Gross  revenue,  per  statement  A  -  -        10,571,062  63 

g  Sundry  accounts,  not  yet  received,  estimated  30,000  00 


10,601,062   63 
Deduct  expenses  of  collection  -  484,018  06 


Nett  revenue        10,117,044  57 


1803.] 


SECRETARY  OF  THE  TREASURY. 


£71 


Explanatory  Statements  and  Notes. 


et     Spirits,  viz: 

Grain,  1st  proof, 

648,624  galls. 

at  28  cts. 

$  181,614  72 

2d      do 

10S,909 

29 

31,583  61 

3d      do 

5,670 

31 

1,757  70 

4th    do 

57,914 

34 

19,690  76 

5th    do 

1,389     ' 

40 

555  60 

6th    do 

5,696 

50 

2,848  00 

Other  materials,  1st  &  2d  p'f. 

1,268,436 

25 

317,109  00 

3d  proof 

3,070,480 

28 

S59,734  40 

4th    do 

2,957,373 

32 

946,359   36 

5th    do 

52,199 

38 

19,835  62 

6th    do 

1,198 

46 
duties 

551   08 

Imported 

8,177,SS8 

2,381,639  85 

Exported 

457,656 

do 
do 

12S,143  68 

Consumed 

7,720,232 

2,253,496   17 

41,511,762  lbs.  at  2i  cts. 
Deduct  excess  of  white,  exported    2,067,948  3 


h     Sugar,  brown 


39,443,S14 


c     Wines,  viz:  Madeira,  1st  quality, 

do        2d       do 

Sherry  and  St.  Lucar,  639,960 

Oporto  and  Lisbon,  275,234 

Burgundy  &  Champaigne,      3,952 

Teneriffe,  Fayal,  and  Malaga,  624,856 

Other  in  bottles,  51,443 

do     in  casks,  80,285 


172,273  at  58  cts. 
64,271  50 
40 
30 
45 
2S 
35 
23 


1,037,794  05 

62,03S  44 

975,755  61 

99,918  34 

32,135  50 

255,984  00 

82,570  20 

1,778  40 

174,959  68 

18,005  05 

18,465  55 


Gallons,        1,912,274       duties,    §683,816  72 


d    Teas,  viz: 


Bohea, 
Souchong, 
Hyson, 
Other  green, 


1,413,268  at  12  cents 
138,860        IS 
142,917         32 

711,893        20 


lbs.    2,406, 93S 


$  169,592   16 

24,994  80 

45,733  44 

142, 37S  60 

duties,    $382,699  00 


272 


REPORTS  OF  THE 


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276  REPORTS  OF  THE  [1803. 

D. 

JIN  ESTIMATE  of  the  Principal  redeemed  of  the. Debt  of  the  United- 
States,  from  1st  October,  1802,  to  30th  September,  1803. 

On  account  of  the  Domestic  Debt. 

The  amount  of  warrants  issued  on  the  Trea- 
surer of  the  United  States,  during  that 
period,  according  to  the  quarter  yearly 
statement  of  receipts  and  expenditures, 
exclusive  of  §2,047^0  repaid  into  the 
Treasury,  was_-  -  -  -   $4,606,352  35 

Deduct  interest,  which  accrued  during  the 

same  period,  calculated  quarter  yearly   -      3,399,555  33 

Leaves  the  amount  of  principal  discharged 1,206,797  02 

Payments  were  made  into  the  Treasury,  in  certificates  of 

the  debt  of  the  United  States,  for  lands  purchased  -  5,343  17 

Payments  were  made  to  foreign  officers,  and  of  certain  parts 

of  the  domestic  debt        -  -  -  -  32,868  22 

On  account  of  the  Foreign  Debt. 

The  amount  of  warrants  issued  on  the  Trea- 
surer, exclusive  of  §108,319-/^  repaid 
into  the  Treasury,  including  g5, 502,  re- 
ceived for  damages  on  bills  pro tested,was      2,278,977  16 
Deduct  interest  one  year       -  400,100  00 
Commissions,  at  I  per  cent.   -       4,001  00 
Add  the  difference  between  41 
cents  per  guilder,  and  40,  the 
par,  on  2,868,588  7  6         -     28,685  88 


432,786  88 
Deduct  damages  received       -       5,502  00 


427,284  88 


1,851,692  28 


Amounting  to  -  -  -  83,096,700  69 


Treasury  Department, 

Register's  Office,  October  22d,  1803. 

JOSEPH  NOURSE,  Register. 


1803.]  SECRETARY  OF  THE  TREASURY.  377 


E. 

An  estimate  of  the  Principal  redeemed  of  the  Debt  of  the  United  States, 
from  the  1st  April,  1801,  to  the  30th  September,  1803. 

On  account  of  the  Domestic  Debt. 

The  payments  from  the  Treasury  of  the  United  States  were  as  follows: 
From  1st  April  1801,   to   the   31stDecem- 

ber  following,  -  -  -     $3,613,378  65 

1st  January,  1802,   to   31st  December 

following,  -  -  -       4,618,021    39 

1st  January,    1803,  to  30th  Septem- 
ber following,  -  -         3,033,828  76 


11,265,228  80 
Deduct  interest  which  accrued  during  the 

above  periods,  viz. 
From  1st  April,  1801,  to  31st  December 

following,  $2,633,636  70 

1st    January,    1802,  to 
31st  December  follow- 
ing, -  3,451,696  97 
1st    Janury,  1803,    to 
30th  September  fol- 
lowing,                 -          2,538,378  91 


Total  interest  which  accrued,  calculated  ^ 

on  the  real  amount  of  principal,  at  >     8,623,712  58 

the  several  rates  of  interest,  3 

Paid  on  account  of  principal,  -  2,641,516  22 

Whereof, 
From  1st  April,  1801,    to   31st  December 

following,  -  -  -  979,741   95 

1st    January,    1802,    to  31st  Decem- 
ber  following,     -  -  -        1,166,324  42 
1st   January,    1803,  to  30th  Septem- 
ber following,      -  495,549  85 


As  above,  ...  -     $2,641,516  22 


Payments  made  in  certificates  of  the  Debt 
of  the  United  States,  on  account  of 
lands  purchased  — 
From  1st  April,  1801,  to  31st  December 

following,  -  -  -  23,816  53 

1st  January,  1802,  to    31st    Decem- 
ber following,       -  15,518  49 
1st  January,   1803,  to    30th    Septem- 
ber following,       -             -             -  4,604  59 


43,939   66 


278  REPORTS  OF  THE  [1803. 

Payments  to  Foreign  Officers,  and  for  certain 

parts  of  the  Domestic  Debt — 
From  1st   April,  1801,  to    31st  December 

following,  ...  18,285  66 

1st  January,  1802,  to  31st  December 

following,  -  -  -  82,961   76 

1st  January,   1803,    to  30th   Septem- 
ber following,      -  -  -  19,026  21 


60,223   63 


Payments  on  account  of  Domestic  Loans — 
From  1st  April,   1801,  to  31st  December 

following,  -  -  -  700,000 

1st    January,  1802,   to   31st  Decem- 
ber following,       -  -  -  1,290,000 

Payments  on  account  of  the  Dutch  Debt — 
From  1st  April,  1801,  to  31st  December 

following,  -  -  -  1,306,726  59 

1st  January,  1802,  to  31st  December 

following,  -  -  -  3,240,399  25 

1st  January,   1803,  to    30th    Septem- 
ber following,       -  1,819,386  73 


1,990,000  00 


Interest  and  Commissions,  viz. 
From  1st  April,  1801,  to    31st  December 
following, 

Guilders,  616,352  10  =  $246,541 
1st  January,  1802,  to 
31st  December  fol- 
lowing, 1,156,827  10  =  462,731 
1st  January,  1803,  to 
30th  September  fol- 
lowing, 917,080  =     366,832 


£6,366,512  57 


1,076,104 


To  which  add, 
The  difference  between 

41  cts.  per  guilder, 

and   40,  the  par,  on 

6,689,779  3  14  =  66,897  79 
Deduct  therefrom  the 

difference     between 

39  and  40  cents  per 

guilder,on  890,364,    8,903  64 

57,994  15 


1,134,098  15 
Damages  received,  deduct  11,910  78 


Leaves  the  total  to  be  deducted 
for  interest  and  commissions,  1,122,1S7  37 


$5,244,325  20 


1803.]  SECRETARY  OF  THE  TREASURY.  279 

Deduct  also  certain  bills  of  exchange  return- 
ed under  protest  for  non-payment, 
and  in  a  way  of  recovery,  but  which 
not  being  applied,  is  deducted, 
Guilders  140,000,  cost,    -  -  $56,000 


5,188,325  20 


Amounting  to  -  -  -  $9,924,004  71 


Treasury  Department, 

Register's  Office,  October  22,  1803. 
JOSEPH  NOURSE,  Register. 

Note  to  Statement  E. 

From  the  amount  of  debt  redeemed  from 
the  1st  April,  1801,  to  the  30th  Sep- 
tember, 1803,  amounting,  as  per  this 
statement,  to  -  -  9,924,004  71 

Deducting  the  amount  redeemed  from  1st 
October,  1802,  to  30th  September, 
1S03,  amounting,  as  per  statement  D,  to  3,096,700  69 

Leaves   the   amount   redeemed,   from    1st 

April,  1801,  to  30th  September,  1S02,  6,827,304  02 

The  Secretary  of  the  Treasury,  in  his  report 
of  the  16th  December,  1802,  states  the 
amount  redeemed  during  the  same  pe- 
riod, exclusively  of  1,287,600  doliars, 
bank  debt,  discharged  out  of  the  pro- 
ceeds of  bank  shares,  at       -  -         5,339,8S6  44 

To  which,  adding  the  amount  of  bank  debt 

thus  discharged,      -  1,287,600  00 


Makes  an  aggregate  of  6,627,488  44 


Making  a  difference  between  this  statement 

and  that  of  the  Secretary,    -  -  199,817  5S 


Arising  as  follows,  viz. 
The  Secretary,  in  his  report  of  Decem- 
ber 18th,  1801,  did  not  include  the 
following  items  of  debt,  discharged  be- 
tween the  1st  April,  and  30th  Septem- 
ber, 1801,  to  wit: 

.  Payments  to  foreign  officers,  and  on  ac- 
count of  certain  parts  of  the  domestic,  17,752  23 
Payment  on  account  of  the  principal  of 
the  domestic  debt,  by  the  reimburse- 
ment of  3  per  cent,  on  the  nominal 
amount  of  the  6  per  cent,  and  deferred 
stocks,         .             -             -                          142,271  28 


2S0  REPORTS  OF  THE  [1803. 

Which  payment  was  exclusively  of  that  to 
the  trustees  of  the  Sinking  Fund,  of 
129,048  S3,  stated  by  the  Secretary  in 
his  report. 

3.  Payment  on  account  of  the  foreign  debt, 
arising  from  his  having  estimated  the 
interest  accruing  during  these  six 
months,  at  one-half  that  of  for  the  cal- 
endar year,  viz.  -  245,980  50 

Whilst  the  real  interest  accru- 
ing during  said  six  months, 
was  -  -  209,272  00 


36,708  50 


II.  The  Secretary,  in  his  report  of  16th  De- 
cember, 1802,  1st,  estimates  the  inter- 
est accrued  on  the  domestic  debt,  from 
1st  October,  1801,  to  30th  September, 
1802,  at      -  -  -  -        3,470,259  75 

By  the  Register's  calculation,  it  amounted  to  3,464,706  29 


57553  46 
2.   He    estimated  the    deduction    on     ac- 
count of  rate  of  exchange  and  bills  in 
suit,  at  less  than  it  really  was,  -  2,619  22 


196,732  01 


2,934  24 


III.  The  Register  has  inserted  in  the  amount 
of  this  estimate  for  a  debt  due  to  the 
United  States,  paid  in  stock,  -  151   33 

111,99,817  5S 


1803.] 


SECRETARY  OF  THE  TREASURY. 


281 


F. 

IMPORTS  from  Floridas  and  Louisiana,  for  the  years  ending  on  SOtk 
September,  1799,  1800,  1801,  and  1802. 


SPECIES  OF  MERCHANDISE. 

1799. 

1800. 

1S01. 

1802. 

Value  of  goods,  ad  val. 

$60,729 

$26,631 

$43,262 

$76,268 

do         Wines,  do 

8,306 

Madeira,  Sherry,  &c.  gals. 

- 

.- 

1,463 

1,753 

All  other  wines, 

2,527 

6,748 

1,971 

5,360 

Spirits  from  grain, 

240 

- 

122 

1,099 

do     other  materials, 

29,743 

- 

9,615 

9,044 

do  domestic  produce, 

- 

34 

1 

Molasses, 

8,778 

42,579 

448 

35,051 

Beer,  Ale,  and  Porter, 

- 

- 

1,013 

611 

Teas,                 -         lbs. 

- 

- 

6,561 

1,137 

Coffee, 

12,011 

6 

30,622 

100,934 

Chocolate, 

4 

- 

150 

1,170 

Sugar,  brown, 

751.512 

1,560,849 

957,169 

1,567,117 

do  white,  clayed, 

22,030 

16 

7,623 

9,134 

do  lump, 

- 

- 

2,231 

474 

do  candy  and  loaf, 

- 

- 

596 

208 

Candles,  tallow, 

- 

- 

897 

614 

'   do  wax, 

- 

- 

- 

5 

Cheese, 

- 

- 

- 

65 

Soap, 

-    . 

- 

2,828 

10,862 

Pepper, 

- 

- 

82 

1,454 

Pimento, 

262 

- 

- 

2,193 

Tobacco,  (say  segars) 

181 

752 

1,243 

1,878 

Snuff, 

- 

4,504 

5 

21 

Indigo, 

65,016 

136,257 

47,740 

60,062 

Cotton, 

842,200 

1,615,265 

2,288,945 

1,921,528 

Nails, 

- 

- 

- 

2,330 

Lead, 

- 

135 

242,928 

208,427 

Cordage  tarred,        cwt. 

53  ' 

- 

do     untarred, 

-  - 

25 

Twine,  &  Packthread, 

-, 

- 

1 

Salt,  glauber, 

- 

- 

1 

do  pounds,             lbs. 

- 

- 

176,286 

143,6S7 

do  bushels,         bush. 

4,232 

5,370 

4,421 

2,733 

Coal, 

- 

- 

- 

306 

Boots,                      pairs, 

- 

1 

- 

1 

Shoes, 

- 

- 

548 

-      148 

Cards,  wool  &  cotton,  doz. 

- 

- 

7 

78 

do  playing        packs, 

- 

- 

IS 

595 

Total  value, 

$507,132 

$904,322 

$956,635 

$1,006,214 

Treasury  Department,  Register's  Office,  Oct.  24th,  1803. 

JOSEPH  NOURSE,  Register. 


282 


REPORTS  OF  THE 


[1803. 


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1803.] 


SECRETARY  OF  THE  TREASURY. 


283 


H. 


EXPORTS  to  Floridas  and  Louisiana,  for  the  years  ending  on  the 
30th  September,  1799,  1800,  1801,  and  1802. 


SPECIES  OF  MERCHANDISE. 

1799. 

1800. 

1801. 

1802. 

Ashes,  pot         ...  tons 

20 

Apples       -         -         -         -     bis 

2,881 

3,240 

2,301 

2,258 

Beer,  Porter,  and  Cider       galls 

25,912 

7,775 

7  924 

14,351 

do         do.               do            doz 

2,429 

320 

1,019 

1,157 

Beef his 

956 

726 

59 

501 

Biscuit,  or  Ship  Bread        -    do 

80 

240 

12 

131 

do  -        -        -        -          kegs 

2,305 

175 

584 

Barley        ...          bush 

21 

Bran  and  Shorts         -        -  do 

10 

5 

Beans         -         -         -         -  do 

334 

10 

120 

31 

Butter       ....    lbs 

60,056 

28,998 

26,766 

51,372 

Boots          ...          pairs 

288 

716 

43 

140 

Bricks        ...     number 

22,439 

24,000 

139,300 

Corn,  Indian      -        -          bush 

2,690 

9,961 

2,235 

39,288 

Cheese       ....    lbs 

51,153 

27,343 

43,678 

43,208 

Coffee        -        -        -        -    do 

2,652 

70,491 

85,737 

42,669 

Chocolate  -        -        -        -    do 

400 

300 

5,318 

5,157 

Cotton       -        -        -        -    do 

1,836,144 

1,210,080 

Candles,  wax     -        -        -    do 

4,500 

14,996 

55 

>do      spermaceti  -        -    do 

1,782 

9,605 

3,394 

1.399 

do      tallow          -        -    do 

94,970 

38,836 

50,024 

24,031 

Cables  and  Cordage  -         -    cwt 

1,212 

76 

1,316 

4,943 

Cards,  wool  and  cotton       -   doz 

28 

528 

168 

do    playing    -         -         packs 

261 

Copper  and  brass,  manufact'd  $ 

4,300 

5,267 

1,177 

Coaches  and  other  carriages      $ 

6,908 

1,276 

1,238 

5,074 

Flour         -        -        -        -    bis 

10,703 

4,356 

76,853 

170,093 

Fish,  dried         -         -     quintals 

1,315 

943 

335 

380 

do     pickled    ...    bis 

580 

150 

28 

489 

do         do        -        -          kegs 

998 

94 

578 

162 

Furniture,  household             dols 

10,714 

5,893 

4,835 

27,559 

Flaxseed             -         -          bush 

5 

Flax lbs 

130 

Gunpowder        -         -         -   do 

358 

846 

Hats  -                                      dols 

16,460 

9,484 

1,778 

3,565 

Hams  and  Bacon        -        -   lbs 

44,082 

27,232 

89,641 

472,554 

Hair-powder       -        -        -  do  , 

9,906 

2,560 

520 

4,299 

Hemp         ....  cwt 

366 

3,530 

Horned  Cattle    -        -    number 

236 

Ho-.ses        --.         do 

100 

Hogs          -                 -         do 

310 

Iron,  pig           '  -                   tons 

20 

do     bar    ...           do 

158 

10 

4 

28 

do     castings      -        -          dols 

973 

2,477 

2,650 

13,421 

do    manufactured    -           do 

40,205 

43,551 

26,429 

45,510 

Lard lbs 

89,199 

37,744 

17,690 

166,  03 

Leather       -        -        -        -    do 

4,024 

3,197 

2,100 

9,092 

824 

67,930 

18,192 

Meal,  Indian       -        -        bush 

75 

578 

524 

1,181 

37 

284 


REPORTS  OF  THE 
STATEMENT  H.— Continued. 


[1803. 


SPECIES  OP  MERCHANDISE. 

1799. 

1800. 

v    1801. 

1802. 

Mustard        -        -        -         lbs 

56 

Medicinal  drug's    -         -        dols 

4,904 

Merchandise                              do 

2,614,045 

1,525,024 

1,681,592 

958,299 

Oil,  linseed  -                           gals 

15 

520 

1,935 

do  spermaceti                        do 

960 

do  whale,  &c.                        do 

3,810 

876 

638 

634 

Osts      ...        -      bush 

692 

Peas      ....         do 

227 

189 

6 

316 

Pork      ....         bis 

492 

819 

1,238 

9,441 

Pitch     -              -                   do 

12 

13 

Potatoes         -        -         -       bush 

2,805 

909 

406 

2,816 

Rice       ....  tierces 

1,499 

364 

231 

356 

Rosin     -                                     bis 

20 

6 

80 

Spices,  pepper      -        -         lbs 

29,132 

4,511 

23,489 

850 

do      pimento                           do 

70 

26 

250 

do      all  other     -         -       dols 

1,200 

11,588 

18,631 

2.7S1 

Spirits,  foreign       -         -        gals 

78,140 

43,294 

6,099 

10,556 

do     domestic  from  foreign  do 

332 

5,209 

3,547 

1,   12 

do           do     from  domestic  do 

321 

2,234 

20,635 

32,699 

Shoes  and  Slippers         -      pairs 

2,229 

3,394 

3,852 

943 

Skins  and  Furs,  value    -        dols 

160 

3,429 

9,630 

Saddlery                                     do 

115 

2,212 

Starch    -                                    lbs 

5,520 

745 

Soap                                            do 

111,684 

217,530 

71,493 

117,469 

Sugar,  brown  &  other  clayed  do 

4,996 

3,996 

11,833 

do     refined         -         -         do 

1,993 

350 

300 

4,605 

Salt         -         -         -        -     bush 

42,287 

9,752 

1,825 

4,107 

Snuff      ....         lbs 

80 

Tobacco,  manufactured  -         do 

71,892 

5,751 

do        unmanufactured  hhds 

56 

19 

1,086 

1,811 

Tallow .---          lbs 

500 

1,837 

Tar       ....          bis 

351 

50 

6 

476 

Turpentine    -         -                   do 

68 

98 

do           spirits  of      -        gals 

1,050 

95 

Tea,  Bohea  -         -        -          lbs 

2,100 

2,231 

2,040 

do   Soichong,  &c.                  do 

3,850 

553 

949 

1,378 

do   Hyson    -                             do 

1,478 

8,664 

7,552 

4,327 

do   other  green    -                    do 

75 

737 

200 

3,587 

Wax     ...                    do 

16.627 

2,911 

!            4,998 

500 

Wines,  Madeira    -         -        gals 

7,296 

919 

542 

1,246 

do      all  other    -         -           do 

313,615 

216,975 

95,516 

158,807 

do      bottled      -        -         doz 

7,831 

5,559 

1,559 

2,277 

Wood,  Staves  and  Heading  No. 

124,850 

99,359 

4,500 

34,500 

do      Shingles    -         -           do 

14,000 

6,000 

5,000 

do      Hoops  and  Poles         do 

83,600 

23,445 

do      Boards,  Plank,  &c     feet 

432,805 

374,642 

60,000 

82,166 

do     all  manufactures  of    dols 

4,938 

1,424 

953 

1,086 

Total  value,  dollars. 

3,504,092 

2,035,789 

3,032,840 

2,821,35 

Treasury  Department, 

Register's  Office,  October  24th,  1803. 

JOSEPH  NOURSE,  Register. 


IS04.]  SECRETARY  OF  THE  TREASURY  Sg5 

REPORT  ON  THE  FINANCES. 

NOVEMBER,  1804. 


In  obedience  to  the  directions  of  the  act,  supplementary  to  the  act,  entitled 
64  An  act  to  establish  the  Treasury  Department,"  the  Secretary  of  the  Trea- 
sury respectfully  submits  the  following  report  and  estimates: 

Revenue. 

The  nett  revenue,  arising  from  duties  on  merchandise  and  tonnage,  which 
accrued  during  the  year  1802,  and  on  which  the  estimates  of  last  year  were 
predicated,  amounted,  as  will  appear  by  the  statement  (A.)  to  $10,154,000. 
The  nett  revenue,  arising  from  the  same  source,  which  accrued  during  the 
year  1803,  has  amounted,  as  appears  by  the  same  statement,  to  11,306,000 
dollars;  and  it  is  ascertained  that  the  nett  revenue  which  accrued  dur- 
ing the  three  first  quarters  of  the  year  1804,  considerably  exceeds  that  of 
the  corresponding  quarters  of  the  year  1803.  Without  drawing  any 
inference  from  the  increase  of  the  present  year,  an  increase  which  must  be 
ascribed  to  the  situation  of  Europe,  and  will,  eventually,  be  diminished  by 
subsequent  re-exportations,  that  branch  of  the  revenue  may,  exclusively  of 
the  Mediterranean  fund,  be  safely  estimated  at  10,730,000  dollars,  which  is 
the  average  of  the  two  years  1802  and  1803.  The  actual  payments  in  the 
Treasury,  on  account  of  those  duties,  during  the  year  ending  on  the  30th  of 
September  last,  amount  nearly  to  the  same  sum;  («,)  and  there  is  no  reason 
to  suppose  that  the  receipts  of  the  ensuing,  will  fall  short  of  those  of  last  year. 

The  statement  (B. )  exhibits,  in  detail,  the  several  species  of  merchandise, 
and  other  sources,  from  which  that  revenue  was  collected,  during  the  year 
1803. 

It  also  appears,  that  the  revenue  arising  from  the  sales  of  public  lands,  is 
gradually  increasing.  The  statement  (C.)  shows,  that  exclusively  of  the 
September  sales,  at  Cincinnati,  three  hundred  and  fourteen  thousand  acres 
have  been  sold  during  the  year  ending  on  the  30th  of  September  last.  The 
proceeds  of  those  sales,  calculated  on  the  supposition  that  every  purchaser 
will  be  entitled  to  the  discount  allowed  in  case  of  prompt  payment,  would 
yield  five  hundred  and  fifteen  thousand  dollars.  And,  notwithstanding  the 
difficuties  which  exist  in  drawing  into  the  Treasury  the  moneys  collected  by 
the  Receivers  of  the  remote  Land  Offices,  it  is  believed  that  the  actual  .re- 
ceipts from  that  source,  will,  for  the  ensuing  year,  exceed  four  hundred  and 
fifty  thousand  dollars. 

The  permanent  revenue  of  the  United  States,  may,  therefore,  including 
the  duties  on  postage,  and  other  small  incidental  branches,  be  computed  at 
eleven  millions  two  hundred  thousand  dollars. 

And  the  payments  in  the  Treasury,  during  the  year  1805,  on  account  of 
the  temporary  duties-which  constitute  the  "Mediterranean  Fund,"  are  es- 
timated at  five  hundred  and  fifty  thousand  dollars;  making,  in  the  whole,  or 
the  probable  receipts  of  that  year,  a  sum  of        -  $11,750,093 

a  10,729,708  dollars  and  54  cents, 


38*  REPORTS  OF  THE  [1804. 

Expenditures. 

The  expenses  of  the  year  1805,  which  must  be  defrayed  out 
of  that  revenue,  consist  of  the  following  items: 

1.  The  annual  appropriation  of  eight  millions  of  dollars,  for 
the  payment  of  the  principal  and  interest  of  the  public  debt; 
of  which  near  3,700,000  dollars  will  be  applicable  to  the 
discharge  of  the  principal,  and  the  residue  to  the  payment 

of  interest       -  -  -  -  -  -  $8,000,00® 

2.  For  the  Civil  Department,  and  all  domestic  expenses  of  a 
civil  nature,  including  military  pensions,  the  light-house 
and   mint   establishments,  and   the   expenses  of  surveying 

public  lands  -  -  -  -  -  953,000 

3.  For  expenses  incident  to  the  intercourse  with  foreign  na- 
tions, including  the  payment  of  awards  under  the  7th  arti- 
cle of  the  British  treaty,  and  the   permanent  appropriation 

for  Algiers  -  -  -  -  -  -  294,000 

4.  For  the  Military  and  Indian  Departments,  including  the 
permanent  appropriation  for  certain  Indian  tribes  -  954  006 

5.  For  the  Naval  Establishment,  viz: — annual  appropriation 
charged  to  the  ordinary  revenue  -  -  650,000 

Extraordinary  expenses  of  the  last  expedition  against 
Tripoli,  which  will  be  payable  in  the  year  1805, 
and  are  chargeable  to  the  Mediterranean  Fund  590,000 


1,240,000 


6.  Reserved  out  of  the  Mediterranean  Fund,  for  meeting  other 
extraordinary  expenses,  which  may  be  incurred  under  the 
act  constituting  the  fund   -----  100,000 


Making,  altogether,  11,540,000 

eleven  millions  five  hundred  and  forty  thousand  dollars,  and 
deducted  from  the  revenue  of  -  11,750,000 


leaves  a  surplus  of  more  than  two  hundred  thousand  dollars.         210,000 


Mediterranean  Fund. 

The  sum  which  may  probably  be  received  during  the  year  1805,  on  ac- 
count of  that  fund,  and  the  paymenls  during  that  year,  which  will  ultimate- 
ly be  charged  to  the  fund,  are  included  in  the  preceding  estimate  of  receipts 
and  expenditures:  but  it  is  necessary  to  give  a  distinct  view  of  the  whole 
amount  of  revenue  and  expenses  under  that  head. 

The  value  of  merchandise,  paying  duties  ad  valorem,  which  was  Import- 
ed in  the  year  1802,  amounts,  after  deducting  the  exportations  of  the  same 
year,  to  31,706,000  dollars.  The  value  of  the  same  description  of  merchan- 
dise, imported  in  the  year  1803,  amounts  to  34,370,000  dollars.  The  addi- 
tional duty  of  2h  per  cent,  on  that  description  of  imported  articles,  consti- 
tutes the  Mediterranean  Fund,  and,  calculated  on  the  average  importations 
of  the  two  years,  would  have  yielded,  annually,  826,000  dollars.  But  seve- 
ral articles,  which,  in  the  years  1802  and  1803  paid  duties  ad  valorem,  hav- 
ing, in  lieu  thereof,  been  charged  with  specific  duties,  by  an  act  of  last  ses- 
sion, are  not  liable  to  the  additional  duty  of  2\  per  cent.  Although  the  value 
of  those  articles  cannot  be  precisely  ascertained,  it  is  believed  thiit  the  de 


1804.1  SECRETARY  OF  THE  TREASURY.  287 

duction,  on  that  account,  will  not  amount  to  50,000  dollars,  and  that  the  pro- 
ceeds of  the  additional  duty  may  be  computed  at  the  annual  sum  of  780,000 
dollars;  and  for  the  eighteen  months  commencing  on  the  1st  July,  1804,  and 
ending  on  the  31st  of  December,  1805,  at  1,170,000  dollars.  The  expenses 
authorized  under  the  act  constituting  the  fund,  have  been  predicated  on  that 
estimate,  and  apportioned  in  the  following  manner: 

1    For  the  Navy  Department,  (in  addition  to  the  annual   appropriation  of 
650,000  dollars,)  viz: 

There  had  been  advanced,  from  the  ordinary  reve- 
nue, prior   to  the  30th  September,  1804,  -  350,000 
A  further  payment  will  be  made  before  the   1st  Jan- 
uary, 1805,  of  130,000 
To  be  paid  during  the  year  1805,  on  account  of  this 
fund,  as  stated  under  the  5th  item  of  expenditures 
for  that  year                -             -                          -  590,000 

1,070,000 

'  2.  Reserved  for  other  extraordinary  expenses  which  may  be 
incurred  for  the  same  object,  being  the  6th  item  of  expen- 
ditures for  the  year  1805,  ...  -  100,000 

$1,170,000 


Those  duties  began  to  operate  on  the  1st  day  of  July  last;  but,  as  they 
are  payable  six,  eight,  nine,  ten,  and  twelve  months  after  the  importation,  no 
part  will  be  paid  in  the  Treasury  during  the  present  year;  and  a  sum  of  only 
550,000  dollars  is  expected  to  be  received  in  the  course  of  the  year  1805. 
For  that  sum  only,  credit  has  been  taken  in  the  general  estimate  of  receipts 
for  that  year;  whilst  a  part  of  the  1,170,000  dollars,  chargeable  to  the  fund, 
has  already  been  expended,  and  the  rest  is  included  in  the  preceding  estimate 
of  expenses  for  1805.  The  difference,  amounting  to  620,000  dollars,  will, 
at  the  end  of  next  year,  consist  of  outstanding  bonds,  payable  in  1806.  And, 
if  the  additional  duty  should,  as  well  as  the  extraordinary  expense  for  which 
it  is  appropriated,  cease  at  that  time,  that  outstanding  balance  will,  as  it  is 
collected,  replace  in  the  Treasury  the  sum  advanced  from  the  ordinary  reve- 
nues, in  anticipation  of  the  proceeds  of  the  fund.  For  it  is  hoped  that  the 
situation  of  the  Treasury  will  render  it  unnecessary  to  recur  to  the  authority 
given  by  the  act,  to  borrow  on  the  credit  of  the  fund. 

Balance  in  the  Treasury. 

The  greater  part  of  the  balance  of  5,860,981  dollars  and  54  cents,  which, 
on  the  30th  day  of  September,  1803,  remained  in  the  Treasury,  was,  in  last 
year's  report,  considered  as  applicable  to  the  payments  of  certain  extraordi- 
nary demands,  therein  stated. 

As  no  payment  has  been  made  on  that  account,  during  last  year,  besides 
the  first  instalment  of  888,000  dollars  due  to  GreatBritain,  nor  any  other  ex- 
traordinary expense  been  discharged  than  the  advance  of  350,000  dollars,  in 
anticipation  of  the  Mediterranean  fund;  the  balance  remaining  in  the  Trea- 
sury on  the  30th  of  September,  1804,  still  amounted  to  4,882,225  dollars 
and  1 1  cents.  That  sum,  together  with  the  estimated  surplus  of  revenue  for 
the  year  1805,  the  sum  advanced  from  the  ordinary  revenue  to  the  Mediter- 
ranean fund,  and  the  arrears  of  direct  tax  and  internal  revenues,  may  still  be 
considered  as  sufficient  to'discharge  the  balance  of  1,776,000  dollars,  due  to 
Great  Britain;  the  loan  of  200,000  dollars,  due  to  Maryland;  and  two  mil- 


28  S  REPORTS  OF  THE 


[1804. 


lions  of  dollars  on  account  of  the  American  claims  assumed  by  the  French 
convention.  As  the  greater  part  of  those  demands  will  be  paid  in  the  course 
of  the  year  1805,  the  balance  will  not,  probably,  at  the  end  of  that  year,  ex- 
ceed the  sum  which  it  is  always  expedient  to  retain  in  the  Treasury. 

Public  Debt. 

It  appears  by  the  estimate  (D.)  that  the  payments  on  account  of  the  principal 
of  the  public  debt,  have,  during  the  year  ending  on  the  30th  of  September 
last,  amounted  to  -  -  -  $3,652,887  15 

.And  during  the  three  years  and  a  half,  commencing  on  the 
1st  day  of  April,  1801,  and  ending  on  the  30th  Sept. 
1804,  to    -  -  -  -.;"*"-  -  $13,576,891  86 


During  the  same  period,  a  new  debt  of  thirteen  millions  of  dollars  has  been 
ereated  by  the  purchase  of  Louisiana,  viz: 

Six  per  cent,  stock  issued  in  conformity  with  the  convention,     $  11,250,000 
Amount  of  American  claims  assumed  by  the  convention,  and 
for  the  payment  of  which  authority  has  been  given  to  obtain 
a  loan,  two  millions  thereof  being  already  provided  for  out 
of  the  surplus  specie  in  the  Treasury,         -  1,750,000 

$13,000,000 


Another  view  of  the  subject  may  be  given  in  the  following  manner: 
The  balance  in  the  Treasury  amounted  on  the 

1st  day  of  April,  ISO  1,  to  -  -$1,794,044  85 

And  on  the  30th  of  Sept.  1804,  to   -  -    4,882,225  11 

Making  an  increase  of  -  $3,088,1S0  26 

From  which  deducting  the  proceeds  of  the  sales  of  the  Bank 

shares,     -  -  -  -  -  -    1,287,600  00 


Leaves  for  the  increase  arising  from  the  ordinary  revenue,     $  1,800,580  26 

From  the  first  day  of  April,  1801,  to  the  30th  September,  1804,  the  fol- 
lowing debts,  which  originated  prior  to  that  period,  have  been  discharged: 
1st.   Payments  on  account  of  the  domestic 

and  foreign  debt,  as  above  stated,  $  13,576,891  86 

2d.  First  instalment  of  the  sum  payable  to 
Great  Britain,  "  in  satisfaction  and  dis- 
charge of  the  money  which  the  United 
States  might  have  been  liable  to  pay  in 
pursuance  of  the  provisions  of  the  sixth  ar- 
ticle of  the  treaty  of  1794,"  888,000  00 

14,464,891   86 


Making  altogether    -  -  $16,265,472  12 

And  from  which,  deducting  fifteen  millions,  being  the  purchase 

money  of  Louisiana,  -  -  15,000,000  00 

Leaves  -  -  $1,265,472   12 


1804.]  SECRETARY  OF  THE  TREASURY.  289 

A  difference  of  more  than  twelve  hundred  thousand  dollars  in  favour  of 
the  United  States. 

It  may  be  added,  that  if  the  revenue  shall,  during  the  ensuing  year,  prove, 
as  is  not  improbable,  more  productive  than  has  been  estimated,  the  surplus 
will  be  applied  towards  the  payment  of  the  above-mentioned  sum  of  1,750,000 
dollars,  yet  unprovided  for,  on  account  of  the  American  claims,  and  will  so 
far  diminish  the  amount  of  the  loan  authorized  for  that  object. 


From  the  preceding  statements  and  estimates  it  results,  that  the  United 
States  have,  during  the  period  of  three  years  and  a  half,  ending  on  the  30th 
Sept.  last,  discharged  a  larger  amount  of  the  principal  of  their  old  debt,  than 
the  whole  amount  of  the  new  debt,  which  has  been  or  may  be  created  in  con- 
sequence of  the  purchase  of  Louisiana;  and  that  their  existing  and  growing 
resources  will,  during  the  ensuing  year,  be  sufficient,  after  defraying  the  cur- 
rent expenses  of  the  year,  and  paying  more  than  3,750,000  dollars,  on  ac- 
count of  the  engagements  resulting  from  the  French  and  British  conventions, 
to  discharge  a  further  sum  of  near  three  millions  and  seven  hundred  thou- 
sand dollars,  of  the  principal  of  the  public  debt. 

All  which  is  respectfully  submitted. 

ALBERT  GALLATIN, 
Secretary  of  the  Treasury. 

Treasury  Department,  November  19th,  1804. 


290 


REPORTS  OF  THE 


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1804.] 


SECRETARY  OF  THE  TREASURY. 


291 


B. 

?  STATEMENT  exhibiting  the  value  and  quantities,  respectively,  of 
Merchandise,  on  which  duties  actually  accrued  during  the  year  1803, 
[consisting  of  the  difference  between  articles  paying  duty,  imported, 
and  those  entitled  to  drawback,  re-exported,)  and,  also,  of  the  nett  re- 
venue which  accrued,  during  that  year,  from  duties  on  Merchandise, 
Tonnage,  Passports,  and  Clearances. 


GOODS  PAYING  DUTIES  AD  VALOREM. 


36,370,279  dollars,  at  12*  per  cent. 
7,616,432       do  15         do 

383,165      do  20        do 


8,959,342  gallons,  at  29  cts.  average 
51,066,934  lbs.  at    2J        average 

2,760,648  bushels,  at  20 
1,772,768  gallons,  at  34         average 
3,174,370  lbs.         at  16         average 
8,495,260  lbs.         at    5        - 
Molasses,    5,963,275  gallons,  at    5        -  - 

All  other  articles  .... 


Deduct  amount  of  duties  refunded      16,402  95 
do      being  difference  in  calculation       130  00 


34,369,876 

a 

Spirits, 

b 

Sugar, 

c 

Salt, 

d 

Wines, 

e 

Teas, 

Coffee, 

3 1  per  cent,  retained  on  drawbacks 
Extra  duty  of  10  per  cent,  on  merchandise  import- 
ed in  foreign  vessels       - 

Nett  amount  of  duties  on  merchandise 

Duties  on  tonnage        - 

Duties  on  passports  and  clearances 

Gross  revenue,  as  per  statement  A 
Accounts  not  received,  estimated  at  - 

Deduct  debentures  issued,  abstracts  for  which  have 
not  been  rendered  - 


Deduct  expenses  of  collection 

Nett  revenue 


3,296,284  87 

1,142,464  80 

76,633  00 


4,515,382  67 

2,594,259  10 
1,290,034  16 
552,129  60 
603,146  06 
509,138  77 
424,763  00 
298,163  75 
509,116  38 


12,000  00 
4,599  50 


11,296,133  49 


16,532  95 


11,279,600  54 
94,096  09 

133,731  85 


11,512,428  48 

166,528  91 

15,902  00 


11,694,859  39 


7,400  50 


11,702,259  89 
404,428  40 


11,297,831  49 


SS 


292 


REPORTS  OF  THE 

Explanatory  Statements  and  Notes. 


[1804. 


a    Spirits,  viz: 

Grain, 

1st  proof 

1,129,110 

gallons, 

at.28  cts. 

$  316,150  80 

2d    do 

66,419 

do 

29 

19,261  51 

3d    do 

587 

do 

31 

181  97 

4th  do 

67,545 

do 

34 

22,965  30 

5th   do 

5,285 

do 

40 

2,114  00 

6th   do 

2,564 

do 

50 

1,282  00 

Other  materials,     1st  &  2d  do 

1,820,222 

do 

25 

455,055  50 

3d  proof 

2,929,723 

do 

•  28 

820,322  44 

4th   do 

3,309,341 

do 

32 

1,058,989  12 

5th  do 

18,741 

do 

38 

7,121  58 

6th  do 

386 

do 

46 
duties, 

177  56 

Imported, 

9,349,923 

2,703,621  78 

Exported, 

t 

390,581 
8,959,342 

do 

109,362  68 

Consumed, 

2,594,259  10 

b    Sugar,  viz: 

Brown, 

48,394,771  pounds,  at  2| 

cents 

- 

1,209,869  27 

White, 

2,672,163 

do             3 

do 

80,164  89 

51,066,934 

1,290,034  16 

e     Salt- 

Imported,  bushels  of  56  pounds 

- 

3,542,872 

Exported, 

- 

23,635 

Amount  of  bounties  and  allowances, 

$151,717  86, 

reduced  into  bushels 

of  salt  at  the 

present  rates, 

758,589 

782,224 

Paying  duty,  b 

ashels  of  56  pounds, 

2,760,648  at  20  cts. 

552,129  69 

d    Wines,  viz: 

Madeira,  1st  quality, 

242,537  gallons,   a 

t  58  cents 

140,671  46 

do       2d     do 

69,644 

do 

50     , 

34,822  00 

Sherry  and  St.  Lucar, 

309,867 

do 

40 

123,946  80 

Oporto  and  Lisbon, 

168,922 

do 

30 

50,676  60 

Burgundy 

and  Champaigne, 

3,738 

do 

45 

1,682  10 

Tenenfte, 

Fayal,  &  Malaga, 

422,638 

do 

28 

118,338  64 

Other  in  b 

ottles, 

43,845 

do 

35 

15,345  75 

do   in  c 

asks, 

Gallons, 

511,577 

do 

23 
duties, 

117,662  71 

1,772,768 

603,146  06 

Teas, 

Viz: 

Bohea, 

- 

1,909,282  lbs.  at  12  cents 

Souchong, 

,  - 

225,139 

do 

18 

Hyson, 

- 

257,509 

do 

32 

Other  green, 

- 

782,440 

do 

20 

Extra  duties  oi 

i  teas  imported  from 

other  places 

than  India, 

- 

- 

Pounds,         3,174,370 


duties, 


229,113  84 
40,525  02 
82,402  88 

156,488  00 

609  03 


$  509,138  77 


J804.]  SECRETARY  OF  THE  TREASURY. 

Explanatory  Statements  and  Notes — Continued. 


293 


f    All  other  articles — 

Beer,  ale,  and  porter 

182,651 

gallons,  at     8  cents 

$14,612  08 

Cocoa, 

507,679 

pounds,  at    2 

10,153  58 

Chocolate,    » 

951 

do 

3 

28  53 

Sugar  candy, 

8,003 

do 

in 

920  34 

loaf, 

9,010 

do 

9 

810  90 

other  refined, 

725 

do 

H 

47  12 

Candles,  tallow, 

21,245 

do 

2 

424  90 

wax, 

1,683 

do 

6 

100  98 

Cheese, 

68,715 

do 

7 

4,810  05 

Soup, 

34,108 

do 

2 

682  16 

Pepper, 

1,828,142 

do 

6 

109,688  52 

Pimento, 

437,505 

do 

4 

17,500  20 

Tobacco, 

111,739 

do 

10 

11,173  90 

do 

12,820 

do 

6 

769  20 

Snuff, 

1,940 

do 

22 

426  80 

do 

61 

do 

10 

6  10 

Indigo, 

130,844 

do 

25 

32,711  00 

Cotton, 

288,330 

do 

3 

8,649  90 

Nails, 

3,674,769 

do 

2 

73,495  38 

Spikes, 

353,485 

do 

1 

3,534  85 

Lead, 

2,657,499 

do 

1 

26,574  99 

Steel, 

7,394 

cwt.  at 

100 

7,394  00 

Hemp, 

122,545 

do 

100 

122,545  00 

Cables, 

829 

do 

180 

1,492  20 

Tarred  cordage 

7,816 

do 

180 

14.068  80 

Untarred  cordage  and  yarn 

,                 1,030 

do 

225 

2,317  50 

Twine  and  pack  thread, 

1,979 

do 

400 

7,916  00 

Glauber  salts, 

1,193 

do 

200 

2,386  00 

Coal, 

419,400  bushels,  at 

5 

20,970  00 

Boots, 

4,443 

pairs,    at 

75 

3,332  25 

Silk  shoes,    - 

2,417 

do 

25 

604  25 

Other  shoes,  for  men  and  women,     54,150 

do 

15 

8,122  50 

do          for  children 

6,199 

do 

10 

619  90 

Wool  cards, 

11 

dozen,  at 

50 

5  50 

Playing  do 

884 

packs,  at 

25 

221  00 

$  509,116  38 

Treasury  Department, 

Register's  Office,  November  14th,  1804. 

JOSEPH  NOURSE,  Register, 


294 


REPORTS  OF  THE 


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REPORTS  OF  THE 


[1804, 


D. 

JIN  ESTIMATE  of  the  Principal  redeemed  of  the  Debt  of  the  United 
States,  from  1st  October,  1803,  to  30th  September,  1804;  showing,  also, 
the  redemption  of  the  Principal  of  the  said  Debt,  from  1st  April, 
1801,  to  30th  September,  1804. 


On  account  of  the  Domestic  Debt. 

The  amount  of  warrants  issued  on  the  Treasurer 
of  the  United  States,  according  to  the  quarter 
yearly  statement  of  receipts  and  expendi- 
tures, from  1st  October,  1803,  to  30th  Sep- 
tember, 1804,  exclusive  of  $946  51,  unpaid 
into  the  Treasury,  was  -     4,367,185  96 

Deduct  interest  which  accrued 
during1  the  same  period,  cal- 
culated quarter  yearly  -     3,325,511  74 


Payments  made  in  certificates  of  the  debt  of  the 
United  States,  on  account  of  lands  purchased 

Payments  to  foreign  officers,  and  for  certain 
parts  of  the  domestic  debt       - 

Payments  on  account  of  domestic  loans  - 

On  account  of  the  Foreign  Debt. 

The  amount  of  waiTants  issued  on  the  Treasurer 
of  the  United  States,-  exclusive  of  $120,000  re- 
paid into  the  Treasury,  and  $4,595  39,  the 
amount  of    commission   to   the    purchasing- 
agents,  was    -  -  -    2,876,541  22 
Deduct  one  year's  interest  on  the 
Dutch  debt,  viz : 
Amount  of  one  year's  interest, 
including   commissions  and 
postage  of  letters,  after  de- 
ducting for  anticipation   of 
interest  paid  bv  commission- 
ers               guilders  693,000 


at  40  cts.  is  dollars  277,200 
Deduct  gain  on  ex- 
change 25,641  77 

251,558  23 
Interest     to    30th 
Sept.,  1804,  on 
the  Louisiana  six 
per  cent,  stock  528,749  93 


780,308  16 


Redemption 
from  1st  Oc- 
tober, 1803, 
to  30th  Sep- 
tember, 1804. 


Redemption 

from  1st  April, 
1801,  to  30th 
Sept'r,  1803, 
as  per  docu 
ment  E,  refer- 
red to  in  Se- 
cretary's re 
port  of  24th 
Oct'r,  1803 


1,041,674  22 

9,206  47 

5,773  40 
500,000  00 


2,096,233  06 


3,652,887  15 


2,641,516  22 

43,939  66 

60,223  63 
1,990,000  00 


Total  princi- 
pal redeem- 
ed, from  1st 
April,  1801, 
to  30th  Sep- 
tember, 1804. 


3,683,190  44 

53,146  13 

65,997  03 
2,490,000  00 


5,188,325  207,284  558  26 


9,924,004  71113,576,891  86 


Treasury  Department,  Register's  Office,  14th  November,  1804. 

JOSEPH  NOURSE,  Register. 


1805.1  SECRETARY  OF  THE  TREASURY.  $97 

REPORT  ON  THE  FINANCES. 

DECEMBER,  1805. 


In  obedience  to  the  directions  of  the  act  supplementary  to  the  act,  entitled 
"An  act  to  establish  the  Treasury  Department,"  the  Secretary  of  the  Trea- 
sury respectfully  submits  the  following  report  and  estimates: 

Revenue  and  Receipts. 

The  nett  revenue,  arising  from  duties  on  merchandise  and 
tonnage,  which  accrued  during  the  year  1801,  amounted  to      $  12,020,279 

The  nett  revenue,  arising  from  the  same  source,  which  ac- 
crued during  the  year  1802,  amounted  to  -  10,154,564 

That  which  accrued  during  the  year  1803,  amounted  to  11,306,430 

And  that  which  accrued  during  the  year  1804,  amounted, 
after  deducting  that  portion  which  arose  from  the  additional 
duties,  constituting  the  Mediterranean  Fund,  as  will  appear  by 
the  statement  (A. )  to  -         -         -         -         -         -         -      12,672,323 

It  is  ascertained  that  the  nett  revenue  which  has  accrued  during  the  three 
first  quarters  of  the  year  1805,  does  not  fall  short  of  that  of  the  correspond- 
ing quarters  of  the  year  1804.  And  that  branch  of  the  revenue  may,  ex- 
clusively of  the  Mediterranean  Fund,  be  safely  estimated,  for  the  present, 
at  twelve  millions  of  dollars,  which  is  nearly  the  average  of  the  two  years 
1803  and  1804. 

The  defalcation  which  took  place  in  the  year  1S02,  and  the  increase  in  the 
next  following  years,  sufficiently  show  that  no  inconsiderable  portion  of  that 
branch  of  the  revenue  is  due  to  the  neutrality  of  the  United  States,  during 
the  continuance  of  war  in  Europe.  Yet,  if  the  revenue  of  1802,  the  only 
year  of  European  peace  since  1792,  be  considered  as  the  best  basis  on  which 
to  form  an  estimate,  this,  with  an  addition  of  ten  per  cent,  on  account  of  the 
increase  of  population  for  three  years,  and  of  near  300,000  dollars,  the 
computed  revenue  of  New  Orleans,  will  give  a  result  of  near  eleven  millions 
and  a  half.  The  statement  (B.)  exhibits  in  detail  the  several  species  of 
merchandise  and  other  sources  from  which  that  revenue  was  collected  during 
the  year  1804. 

The  revenue  arising  from  the  sales  of  public  lands  has  been  greater  during 
the  year  ending  on  the  30th  September,  1805,  than  that  of  any  preceding 
year.  It  appears  by  the  statement  (C.)  that  during  that  period,  besides 
145,000  acres  sold  to  persons  claiming  a  right  of  pre-emption,  474,000  acres 
have  been  disposed  of  at  the  ordinary  sales;  making,  altogether,  with  the 
preceding  sales,  from  the  time  when  the  Land  Offices  were  opened  in  1800 
and  1801,  an  aggregate  of  near  two  millions  of  acres.  The  actual  payments 
by  purchasers,  which,  during  the  year  ending  on  the  30th  September,  1804, 
had  amounted  to  432,000  dollars,  and  -had  not  in  any  one  previous  year 
exceeded  250,000  dollars,  have,  during  the  year  ending  on  the  30th  Sept. 
1805,  amounted  to  575,000  dollars;  of  which  sum  535,000  dollars  were 
paid  in  specie,  and  the  residue  in  stock  of  the  public  debt.  The  specie  re- 
ceipts from  that  source  may,  for  the  ensuing  year,  be  safely  estimated  at  five 
hundred  thousand  dollars. 

The  receipts  arising  from  the  permanent  revenue  of  the  United  States, 
may,  therefore,  without  even  including  the  duties  on  postage  and  other  small 


£98  REPORTS  OF  THE  {"1805. 

incidental  branches,  be  computed,  for  the  year  1806,  at  twelve  millioas  and 
five  hundred  thousand  dollars,  -  -  -  -  $  12,500,000 

The  payments  in  the  Treasury,  during  the  same  year,  on 
account  of  the  temporary  duties  constituting  the  "  Mediter- 
ranean Fund,"  which  will  have  accrued  to  the  31st  day  of 
March  next,  are  estimated  at  nine  hundred  thousand  dollars, 
and  about  one  hundred  thousand  may  be  expected  from  the 
arrears  of  internal  duties  and  of  the  direct  tax,  and  from  other 
incidental  branches;  making,  for  temporary  and  incidental 
receipts,  one  million  of  dollars,  -  1,000,000 

The  balance  of  specie  in  the  Treasury,  which,  on  the  30th 
day  of  September  last  amounted  to  4,575,654  dollars,  will,  as 
the  receipts  and  current  expenditures  of  the  present  quarter 
may  be  considered  as  nearly  equal,  be  diminished  at  the  end 
of  this  year,  onlyTSy  the  payments  on  account  of  the  American 
claims  assumed  by  the  Convention  with  France;  and  as  the 
whole  amount  of  those  claims  which  remained  unpaid  on  the 
30th  day  of  September  last,  will,  in  this  estimate,  be  stated 
amongst  the  expenditures  of  1806,  the  whole  of  the  above- 
mentioned  balance  may  be  added  to  the  receipts  of  that  year, 
viz:  -  -  -  4,575,000 

Making,  in  the  whole,  an  aggregate  of  more  than  -     $  18,075,00 

Expenditures. 

The  expenses  of  the  year  1806,  which  must  be  defrayed  out  of  those 
resources,  are,  like  the  revenue,  either  of  a  permanent  nature  or  temporary. 

The  permanent  expenses  are  estimated  at  11,450,000  dollars,  and  consist 
of  the  following  items,  viz: 

1.  The  annual  appropriation  of  eight  millions  of  dollars  for  the  payment 
of  the  principal  and  interest  of  the  public  debt,  of  which  more  than 
4,000,000  dollars  will  be  applicable  to  the  discharge  of  the  principal,  and  the 
residue  to  the  payment  of  interest,  -  -  .     $  8,000,000 

2.  For  the  Civil  Department  and  all  domestic  expenses  of  a 
civil  nature,  including  invalid  pensions,  the  light  house  and 
mint  establishments,  the  expenses  of  surveying  public  lands, 
the  third  instalment  of  the  loan  due  to  Maryland,  and  a  sum 
of  150,000  dollars,  to  meet  such  miscellaneous  claims  or  grants 

as  may  be  allowed  by  Congress,         -  -  -  .        1,150,000 

3.  For  expenses  incident  to  the  intercourse  with  foreign 

nations,  including  the  permanent  appropriation  for  Algiers,  200,000 

4.  For  the  Military  and  Indian  Departments,  including  the 
permanent  appropriations  for  certain  Indian  tribes,  -         1,030,000 

5.  For  the  Naval  establishment,  (exclusively  of  deficien- 
cies for  the  service  of  the  years  1804  and    1805,  which  are 

estimated  at  600,000  dollars,)  -  1,070,000 


11,450,000 


The  extraordinary  demands  for  the  year  1806,  amount  to  four  millions  of 
dollars,  viz: 

The  Navy  deficiencies  for  1804  and  1805;  as 
above-mentioned  ....  600,000 


1805/]  -SECRETARY  OF  THE  TREASURY.  099 

And  the  balance  of  the  American  claims  as- 
sumed by  the  French  Convention,  which  remain- 
ed unpaid  on  the  30th  Sept.  last,  amounting  to  3,400,000 

4.000,000 

Making  altogether  -  -  -  -       15,450,000 


It  appears  from  the  preceding  statement  that  the  permanent  revenues  of 
the  United  States  will,  during  the  ensuing  year,  exceed  the  permanent  expen- 
ditures by  a  sum  of  more  than  one  million  of  dollars;  and  that  the  moneys 
already  on  hand,  together  with  the  temporary  resources  of  the  year,  will, 
after  leaving  the  sum  which  it  is  always  necessary  to  keep  in  the  Treasury, 
be  sufficient  to  discharge  the  Navy  deficiencies  and  the  whole  amount  of  the 
claims  assumed  by  the  Convention  with  France,  the  large  receipts  of  last 
year  rendering  it  unnecessary  to  recur  for  that  object  to  the  loan  authorized 
by  the  act  of  the  10th  of  November,  1803. 

Mediterranean  Fund. 

It  appears  by  the  statement  (B. )  that  the  additional  duty  of  two  and  a-half 
per  cent,  on  goods  paying  duties  ad  valorem,  which  constitutes  the  "Mediter- 
ranean Fund,"  amounted,  during  the  six  last  months  of  1804,  to  563,038 
dollars.  And  it  is  ascertained  that  the  amount  of  the  duty  accrued  during 
the  year  ending  on  the  30th  day  of  June,  1805,  was  990,000  dollars.  This 
apparent  product  will,  it  is  true,  be  diminished  by  subsequent  exportations: 
but  it  is  believed,  from  a  view  of  the  value  of  the  goods  imported  in  1S03 
and  1804,  which  are  charged  with  that  duty,  that  the  fund  may  be  estimated 
as  producing  nearly  $900,000  a  year.  If  that  estimate  be  correct,  the  fund 
will  ultimately  produce,  during  the  one  year  and  nine  months  commencing  on 
the  1st  day  July,  1804,and  cndingon  the  31st  day  of  March,  1806,     1,575,000 

The  expenses  heretofore  charged  on  that  fund, have  been,  viz: 

Paid  in  1804,  to  the  Navy  Department,  under  the 
act  constituting  the  fund,     -  -  -  -        5.25,000 

Paid  in  1805,  to  the  said  Department,  by  virtue  of 
the  2d  section  of  the  act  of  25th  January,  1805,  590,000 

Making  altogether  -  1,115,000 

And  leaving  an  unappropriated  surplus,  estimated  at  460,000 

But  which  will  be  more  than  absorbed  by  the  Navy  deficiencies  above-men- 
tioned. 

The  moneys  actually  received  or  to  be  received  into  the  Treasury,  on 
account  of  that  fund,  prior  to  the  1st  day  of  January,  1806,  are  estimated  at 
about  $600,00®.  The  residue  will  be  received  between  that  day  and  the  31st 
day  of  March,  1807,  and  credit  has  been  taken  for  a  sum  of  $900,000  on  that 
account,  in  the  preceding  estimate  of  the  receipts  of  the  year  1806. 

Public  Debt. 

The  payments  on  account  of  the   principal  of  the  public 
debt,  have,  during  the  year  ending  on  the  30th  Septem- 
ber, 1805,  exceeded  four  millions  three  hundred  and  se- 
venty-seven thousand  dollars,  as  appears  by  estimate  (D.)    $  4,377,898  63 
The  two  last  instalments  due  to  Great  Britain,  and  amount- 

39 


300  REPORTS  OF  THE  [1805. 

ing  to  one  million  seven  hundred  and  seventy-six  thousand 

dollars,  have  also  been  discharged  during  the  same  period,       1,776,000  00 

making  in  the  whole  a  reimbursement  of  more  than  six  mil-     ■ *«• 

lions  one  hundred  and  fifty  thousand  dollars.  6,153,898  63 

As  the  exportation  of  the  specie  necessary  to  discharge 
the  last  mentioned  instalment,  would  have  been  sensibly 
felt,  it  was  found  eligible  to  pay  it  in  London,  in  conformi- 
ty with  the  authority  given  by  the  act  of  the  3d  of  March, 
1805;  and  the  operation  was  effected  at  par,  by  the  Bank  of 
the  United  States. 

It  appears  by  the  same  statement  (D  )  that  the  payments  on 
account  of  the  public  debt,  from  the  1st  April,  1801,  to  the 
30th  Sept.lS05,  have  amounted  to  almost  $18,000,000  17,954,790  49 
During  the  same  period  there  have  been  paid  to  Great  Bri- 
tain, in  satisfaction  and  discharge  of  the  money  which  the 
United  States  might  have  been  liable  to  pay,  in  pursuance 
of  the  provisions  of  the  6th  article  of  the  treaty  of  1794,  2,664,000  00 

The  balance  in  the  Treasury,  amounted  on 

the  1st  day  of  April,  1801,  to  -       1,794,052  59 

And  on  the  30th  day  of  Sept.  1S05,  to  4,575,654  37 

Making  an  increase  of  2,781,601   78 

From  which,  deducting  the  proceeds  of  the 

sales  of  the  Bank  shares,  -  -       1,2S7,600  00 

Leaves  for  the  increase  arising  from  the  ordinary  revenue,        1,494,001   78 


Making,  in  the  whole,  a  difference  of  more  than  twenty-two    22,112,792  27 
millions  of  dollars  in  favor  of  the   United  States,  during 
that  period  of  four  years  and  a  half. 

In  order  to  give  a  more  general  and  concise  view  of  the  receipts  and  ex- 
penditures of  the  United  States,  during  the  four  years,  commencing  on  the 
1st  day  of  April,   1801,  and  ending  on  the  31st  day  of  March,    1S05,  than 
can  be  derived  from  the  annual  printed  accounts,  a  statement,  marked  (H.) 
and  several  explanatory  statements,  marked  (H  1.  to  H  8.)  have  been  added 
to  those  which  usually  accompany  this  report. 

From  those  it  appears  that  a  sum  of  fifty  millions  six  hundred  and  sixty- 
seven   thousand    four   hundred    and  sixty-seven  dollars  and  four  cents,  has 
been  paid  into  the  Treasury  during  that  period,  viz: 
From  duties  on  tonnage,  and  on  the  importation  of  foreign 

merchandise,     ------    45,174,837  22 

From  all  other  sources  (including  Si, 596, 171  43  cents,  aris- 
ing from  the  sales  of  Bank  shares  and  of  public  vessels,)        5,492,629  S2 

50,667,467  04 


And  that  the  expenditures,  during  the  same  period,  have  amounted  to  ior- 
ty-nine  millions  six  hundred  and  sixty-five  thousand  five  hundred  and  twen- 
ty-seven dollars  and  fifty-six  cents,  which  have  been  disbursed  for  the  fol- 
lowing purposes: 

1 .  Less  than  one-third  of  the  whole  has  been  sufficient  to  defray  all  the 
current  expenses  of  the  United  States,  viz: 
For  the  Civil  List,  and  all  domestic  ex- 
penses of  a  civil  nature  -  -      3,786,114  79 


1805.J  SECRETARY  OF  THE  TREASURY.  qq \ 

For  the  Military  Establishment  and  Indian 

Department,     -  4,405,192  26 

For  the  Naval  Establishment,       -  -      4,842,635  15 

For  the  expenses  attending  the  intercourse 

with  foreign  nations,    -  1,071,437  84 

Amounting  altogether  to  14,105,380  04 

2.  Near  one-third  was  necessary  to  pay  the  interest  on  the 

public  debt,  viz:  -  -  -  -  ".-     16,278,700  95 

On  which  subject  it  may  not  be  improper  to  observe,  that 
a  part  of  that  sum,  amounting  to  $3,160,000,  was  paid  on  ac- 
count of  the  interest  on  the  deferred  stock,  a  charge  which 
commenced  only  in  the  yeai  1801,  and  was  therefore  in  ad- 
dition to  the  annual  sum  wanted  before  that  year,  for  the 
payment  of  interest  on  the  public  debt. 

3.   More  than  one-third,  and  which  may  be  considered  as 
the  surplus  revenue  of  the  United  States,  during  that  period, 
has  been  applied  towards  the  reimbursement  and  extinguish- 
ment of  the  debt,  viz: 
On  account  of  the  principal  of  the  public 

debt  proper,      -  -  -  -    16,317,663  92 

In  payment  of  debts  contracted  before  the 

1st  day  of  April,  1801,  and  arising  under 

the  British  treaty  and  under  the  French 

convention  of  30th  September,  1800,  2,963,782  65 


19,281,446  57 
49,665,527  56 

It  is  sufficiently  evident,  that,  whilst  one-third  of  the  national  revenue  is 
necessarily  absorbed  by  the  payment  of  interest,  a  persevering  application 
of  the  resources  afforded  by  seasons  of  peace  and  prosperity,  to  the  discharge 
of  the  principal,  in  the  manner  directed  by  the  Legislature,  is  the  only  effec- 
tual mode  by  which  the  United  States  can  ultimately  obtain  the  full  com- 
mand of  their  revenue,  and  the  free  disposal  of  all  their  resources.  Every 
year  produces  a  diminution  of  interest,  and  a  positive  increase  of  reve- 
nue. Four  years  more  will  be  sufficient  to  discharge,  (in  addition  to  thean- 
nual  reimbursements  on  the  six  per  cent,  and  deferred  stocks,)  the  remain- 
der of  the  Dutch  debt,  and  the  whole  of  the  eight  per  cent,  navy  six  per 
cent.,  five  and  a  half  per  cent.,  and  four  and  a  half  per  cent,  stocks.  As  the 
portion  of  the  public  debt  which  shall  then  remain  unpaid,  will  consist  of  the 
six  per  cent,  deferred,  and  Louisiana  stocks,  neither  of  which  can  be  reim- 
bursed, except  at  the  periods,  and  in  the  proportions  fixed  by  contract,  and 
of  the  three  per  cent,  stock,  which  its  low  rate  of  interest  will  render  it  in- 
eligible to  discharge  at  its  nominal  value,  the  rapidity  of  the  reduction  of 
the  debt,  beyond  the  annual  reimbursements  permitted  by  the  contracts, 
will,  after  the  year  1809,  depend  on  the  price  at  which  purchases  may  be  ef- 
fected. And,  should  circumstances  render  it  eligible,  a  considerable  portion 
of  the  revenue  now  appropriated  for  that  purpose,  may  then,  in  conformity 
with  existing  provisions,  be  applied  to  other  objects. 

All  Which  is  respectfullv  submitted. 

ALBERT  GALLATIN, 

Secretary  of  the  Treasury. 

Treasury  Departmext,  December  9th,  1805. 


Joa 


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1805.] 


SECRETARY  OF  THE  TREASURY. 


303 


B. 

A  STATEMENT  exhibiting  the  value  and  quantities^  respectively ,  of 
Merchandise,  on  which  duties  actually  accrued,  during  the  year  1804, 
(consisting  of  the  difference  between  articles  paying  duty,  imported, 
and  those  entitled  to  drawback,  re-exported,)  and,  also,  of  the  nett  re- 
venue which  accrued,  during  that  year,  from  duties  on  Merchandise, 
Tonnage,  Passports,  and  Clearances. 


Goods  paying  duties  ad  valorem. 

'30,211,367  dollars,  at  12*  per  cent.     - 
7,641,925         do        15         do  -  - 

425,236        do        20        do 

Additional  duty  on  22,297,845  dollars,  at  2 \  per  ct. 


38,273,528  dollars 


Dollars 


Spirits 

Sugar 

Salt 

Wines 

Teas 

Coffee 

Molasses 


10,488,696  gallons,  at  29.2  cts.  average 


/     All  other  articles 


55,070,013  pounds,  at    2.5 
2,439,241  bushels,  at  20 
3,003,312  gallons,  at  31.9 
2,423,074  pounds,  at  20 
6,101,191        do     at    5 
6,535,513  gallons,  at    5 


average 

average 
average 


Dollars 


Deduct  duties  refunded,  and  difference  in  calculation 

3^  per  cent,  retained  on  drawbacks     - 

Extra  duty  of  10  per  cent,  on  merchandise  imported  in  foreign 
vessels  ...... 

Nett  amount  of  duties  on  merchandise 
Duties  on  tonnage  - 

Light  money        -  -  -  -  - 

Duties  on  passports  and  clearances  - 

Gross  revenue,  per  statement  A    - 

Deduct  expenses  of  collection        ... 

Nett  revenue 


3,776,420  87 

1,146,288  75 

85,047  20 

557,446  12 


5,565,202  94 


3,061,007  38 
1,382,959  01 
487,848  20 
958,117  79 
485,133  40 
305,059  55 
326,775  65 
488,854  38 


13,060,958  30 
15,448  52 


159,429  84 
49,300  16, 


13,045,509  78 
245,000  56 

188,162  71 


13,478,673  05 


208,730  00 
17,334  00 


13,704,737  05 
484,045  68 


13,220,691  37 


304 


REPORTS  OF  THE 

Explanatory  Statements  and  Notes. 


[1805. 


A 

Additional  duty  of  24  per  rent. 

557,446  12 

3£  per  cent,  retained  on  d.awback 

- 

- 

- 

1,710  12 

Extra  duty  of  10  per  cent,  on  merchandise  imported  in  foreign  vessels 

Dollars 

Spirits — 

3,881  77 

563,038  01 

a 

Grain,        --           1st  proof,              1,083,674 

gallons, 

at  28  cents 

303,428  72 

2d      do            -        29,812 

do 

29 

do 

8,645  48 

3d      do            -          4,761 

do 

31 

do 

1,475  91 

4th      do             -         52,168 

do 

34 

do 

17,737  12 

5th     do            -          3,653 

do 

40 

do 

1,461  20 

6th      do            -             217 

do 

50 

do 

108  50 

Other  materials,  1st  and  2d  proof  2,086,319 

do 

25 

do 

521,579  75 

3d                  do    2,681,848 

do 

28 

do 

750,917  44 

4th                 do    4,531,991 

do 

32 

do 

1,450,237  12 

5th                do          14,253 

do 

s 

38 

do 

5,416  14 

10,488,696 

3,061,007  38 

h 

Sugar,  brown,         53,828,275  pounds,  at  2£  cenl 

1,345,706  87 

white,            1,241,738          do         3       do 

3,433,996 

37,252  14 

55,070,013 

1,382,959  01 

0 

Salt,  imported,  bushels  of  56  pounds, 

Exported,         -            -            -        31,047 

Amount  of  bounties  and  allow- 

ances,  $192,741  51,   reduced 

into  bushels  at  the  present  rates,  963 ,708 

994,755 

)cts. 
cents 

Paying  duty,  bushels  of  56  pounds, 

2,439,241  at  2( 

487,848  20 

d 

Wines,  Madeira,  1st  quality,            -          242,500 

gallons, 

at  58 

140j650  00 

2d       do                 -           134.587 

do 

50 

do 

67,293  50 

Sherry  and  St.  Lucar,         -          553,962 

do 

40 

do 

221,584  80 

Oporto  and  Lisbon,             -           254,999 

do 

30 

do 

76,499  70 

Burgundy  and  Champaign,                1,766 

do 

45 

do 

794  70 

TenerifTe,  Faval,  and  Malaga,      477,103 

do 

28 

do 

133,588  84 

Other,  in  bottles,    -            -            82,295 

do 

35 

do 

28,803  25 

Do    in  casks,       -            -       1,256,100 

do 

at  12  < 

23 
:ents 

do 

288,903  00 

3,003,312 

958,117  79 

e 

Teas,  Bohea,         -            -            428,132  pounds, 

51,375  84 

Souchong,             •  -            912,238        do 

18 

do 

- 

164,202  84 

Hyson,         -            -            439,196        do 

32 

do 

- 

140,542  72 

Other  green,            -            643,508        do 

20 

do 

- 

128,701  60 

2,423.074 

Extra  duty  on  teas  imported  from  other  places  than  India 

310  40 

485,133  40 

1805.] 


SECRETARY  OF  THE  TREASURY. 


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JIN  ESTIMATE  of  the  Principal  redeemed  of  the  Debt  of  the  United 
States,  from  the  1st  October,  1804,  to  the  QQth  September,  1805,  inclu- 
sive; shoiving,  also,  the  redemption  of  the  Principal  of  the  said  Debt, 
from  1st  April,  1801,  to  the  30th  September,  1805. 


Redemption 

from  1st  April, 

Redemption 

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1805. 

the  Secretary's 
report  of  19th 

1805. 

On  account  of  the  Domestic  Debt. 

Nov.  1804. 

The  amount  of  warrants  issued  on  the  Trea- 

surer of  the  United  States,  according1  to 

the  quarter  yearly  statement  of  receipts 

and  expenditures,  from  1st  Oct.  1804,  to 

30th  Sept.  1805,  exclusive  of  $560  02, 

repaid  into  the  Treasury,  was  4,720,156  68 

Denuct  interest  which  accrued 

during  the  same  period,  cal- 

culated quarter  yearly              3, 245,743  96 

1,474,412  72 

3,683,190  44 

5,157,603  16 

Payments  made  in  certificates  of  the  debt  of 

the   United  States,  on  account  of  lands 

purchased              .... 

41,471  68 

53,146  13 

94,617  81 

Payments  made  to  foreign  officers,    and  for 

certain  parts  of  the  domestic  debt 

8,112  21 

65,997  03 

74,109  24 

Payments  on  account  of  domestic  loans 

950,000  00 

2,490,000  00 

3,440,000  00 

On  account  of  the  Foreign  Debt. 

The  amount  of  warrants  issued  on  the  Trea- 

surer, exclusive  of  $4,458  74,  the  com- 

mission to  agents  purchasing  bills  of  ex- 

change, was  -            -            2,627,067  93 

Deduct  interest  accruingthere- 

on,  viz: 

On  the  Dutch  debt,  including 

, 

commissions  and 

charges                 179,667  76 

On  the  Louisiana  6 

per  cent,  stock, 

including     com- 

missions               678,375  00 

858,042  76 

Deduct  s^ain  on  ex- 

change                 134,876  85 

7°3  165  91 

1,903,902  02 

7,284,558  26 

9,188,460  28 

4,377,898  63 

13,576,891  86 

17,954,790  49 

Treasury  Department,  Register's  Office,  December  9th,  1805. 

JOSEPH  NOURSE,  Register 


1805.] 


SECRETARY  OF  THE  TREASURY. 


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-312 


REPORTS  OF  THE 


[1805. 


F. 

STJl  TEMENT  exhibiting  the  value  and  quantities,  respectively,  of  Mer- 
chandise, on  which  duties  actually  accrued,  during  the  year  1801  con- 
sisting of  the  difference  between  articles  paying  duty,  imported,  and 
those  entitled  to  drawback  re-exported;  and  also  of  the  nett  revenue 
which  accrued  during  that  year,  from  duties  on  Merchandise,  Ton- 
nage, Passports  and  Clearances. 


GOODS  PAYING  DUTIES  AD  VALOREM. 


$34,207,S44  at  12i  per  cent. 
8,815,170  at  15      do 
504,570  at  20      do 

4,275,980  50 

1,322,275  50 

100,914  00 

43,527,584 

a.  Spirits,         7,608,563  gallons,   at  29.2  av. 

b.  Sugar,        47,882,376  pounds,  at  2\  cents, 

c.  Salt,              2,881,803  bushels,  at  20  cents, 

d.  Wines,         1,223,721  gallons,  at  35  cts. av. 

e.  Teas,             2,669,831  pounds,  at   18.2 
Coffee,           8,471,396  pounds,  at  5  cents, 

/.  Molasses,      5,447,545  gallons,  at  5  cents, 
g.  All  other  articles, 

$5,699,170  00 
2,221,064  36 
1,199,384  29 
576,360  60 
428,411   01 
484,636   12 
423,569  80 
272,377  25 
432,124  03 

Deduct  amount  of  duties  refunded, 

11,737,097  46 
37,773  03 

11,699,324  43 
305,825  86 

256,238  46 

33  per  cent,  retained  on  drawbacks, 
Extra  duty  of  10  per  cent,  on  merchandise 
imported  in  foreign  vessels, 

Nett  amount  of  duties  on  merchandise, 

Duties  on  tonnage, 

Duties  on  passports  and  clearances, 

12,261,388  75 

172,826  29 

17,756  00 

Gross  revenue  per  statement  A, 
Deduct  expenses  of  collection, 

12,451,971  04 
451,555  IS 

Nett  revenue, 

12,000,415  89 

1805.] 


SECRETARY  OF  THE  TREASURY. 

Explanatory  Statements  and  Notes. 


Salt— Imported  bushels,  of  56  lbs.  3,471, 004 

Exported  72,021 

Amount  of  bounty  and 
allowances,  103,435 
92-100,reduced  into 
bushels  at  the  pre- 
sent rates,  517,180       589,201 


Paying  duty,  bushels  of  56  lbs.      2,881,803  at  20  cents, 


Wines — Madeira,  1st  quality, 
Do      2d    do 
Sherry  and  St.  Lucar,        62, 181 
Oporto  and  Lisbon,  450,080 

Burgundy  &  Champaign,     3,863 
Teneriffe,   Fayal,  and 

Malaga,  252,545 

All  other  in  bottles,  72,245 

Do         in  casks,  128,109 


174,548  gallons  at  58  cents, 
80,150         do       50     do 

do 

do 

do 


40  do 
30  do 
45     do 


do 
do 
do 


28  do 
35  do 
23     do 


1,223,721  gallons, 


Teas — Bohea, 

Souchong, 
Hyson, 
Other  green, 


1,032,486  pounds  at  12  cents 
488,311        do        18    do 
306,139        do       32     do 
842.895        do        20    do 


Extra  duty  on  teas  imported  from  other  places  than  India, 


Molasses — Imp  orted, 
Exported, 
Spirits  distilled, 

Molasses  consumed, 

Spirits  distilled, 

Drawback  on  spirits  ex- 
ported, $37,699  37, 
reduced  into  gal- 
lons at  15  cents, 

Spirits  consumed, 


2,669,831  pounds. 

6,029,825  gallons, 
gal.  330,951 

1,778,299-2,109,250 


1,778,299 


3,920,575 


251,329 


1,526,970 


313 


Spirits — Grain,             1st  proof,  716,817  gallons 

it  28  cents, 

200,708  76 

2d 

do       86,370 

do 

29 

do 

25,047  30 

3d 

do          9,095 

dc 

31 

do 

2,819  45 

4th 

do       61,637 

do 

34 

do 

20,956  58 

Other  materials,           1st  &  2d  1,391,919 

do 

25 

do 

347,979  75 

3d 

do  2,724,308 

do 

28 

do 

762,806  24 

4th 

do  3,099,911 

do 

32 

do 

991,971  52 

5th 

do       35,326 

do 

38 

do 

13,423  88 

6th 

do            336 

do 
gallons 

46 

do 

154  56 

Imported, 

8,125,719  j 

$2,365,868  04 

Exported, 

517,156 

lbs.    at 

2* 

cents, 

144,803  63 

Consumed, 

7,608,563 
47,417,397 

2,221,064  36 

Sugar — Brown, 

1,185,434  92 

White, 

464,979 

do 

o 

do        - 

13,949  37 

47,882  376 

$1,199,384  29 

576,360  60 


101,237  84 
40.075  00 
24,872  40 

135,024  00 
1,738  35 

70,712  60 

25,285  75' 
29,465  07 

16428,411  01 

123,898  32 
87,895  98 
97,964  48 

168,579  00 
6,298  34 

484,636  12 


Total  molasses  and  spirits  consumed,    5,447,545  at  5  cents, 


272,377  25 


314  REPORTS  OF  THE  [1805. 

Explanatory  Statements  and  Notes— Continued. 


QUANTITIES. 


ALL  OTHER  ARTICLES. 


Excess  o 
importatioi 
over  expor- 
tation. 


Beer,  ale  &  porter,  gal's 
Cocoa,  lbs 

Chocolate,  . do 

Sugar  candy,    "  do 

Do  loaf,  d< 

Do  other  refined,     do 
Candles,  tallow,  do 

Do     wax,  do 

Cheese,  do 

Soap,  do 

Pepper,  *  do 

Pimento  do 

,  Tobacco,  do 

Snuff,  do 

Indigo,  do 

Cotton,  do 

Nails,  do 

Spikes,  do 

Lead,  &  manufactures  of 
Steel,  cwt 

Hemp,  do 

Cables,  do 

Cordage,  tarred,  do 

Do  untarred,  do 
Twine  &.  packthread,  do 
Glauber  salts,  do 

Coal,  bushels, 

Boots,  pairs, 

Shoes,  silk,  do 

Do  all  other  for  men 
and  women,        do 

Do  for  children,      do 
Cards,  wool  &  cotton,  do 

Do     playing,      packs, 
Domestic  spirits  from 

molasses,  gal's 

-Do     from  domestic 
produce,  do 


158,422 

1,094,023 

3,104 

4,971 

6,879 

6,932 

176,323 

2,451 

66,724 

457,059 
113,079 
164,912 

210,224 

512,308 

3,120,691 

280,237 

1,783,900 

14,844 

80,851 

990 

24,738 

1,439 

1,696 

1,346 

616.48"- 

6,57 -j 

1,650 

79,152 

6,441 

70 


3,467 


Excess  of 
xportation 
)ver  impor 
'ation. 


461,560 


5,061 


21,921 


519 


Rate 

of 
duty 


Excess  of 
duties  over 
drawback 


Excess  of 

drawback 

over  duties. 


Cts. 
8 
2 
3 

Hi 

9 
6? 

2 
6 

r 

2 
6 

4 

10 

22 

25 

3 

2 

1 

1 

100 

100 

180 

180 

225 

400 

200 

5 

75 

25 

15 

10 
50 
25 

15 


12,673  76 

21,880  46 

93  12 

571  67 

619  11 

450  58 

3,526  46 

147  06 

4,670  68 

27,423  54 

4,523  16 

16,491  20 

52,556  00 

15,369  24 

62,413  82 

2,802  37 

17,839  00 

14,844  00 

80,851  00 

1,782  00 

44,528  40 

3,237  75 

6,784  00 

2,692  00 

30,824  15 

4,931  25 

387  50 

11,872  80 

644  10 

35  00 


520  05 


9,231  20 


1,113  42 


5,480  25 


36  33 


447,985    23    15,861   20 


432,124  03 


Treasury  Department,  Register's  Office,  December  9th,  1S05. 

JOSEPH  NOURSE,  Register. 


1805.] 


SECRETARY  OF  THE  TREASURY. 


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1806.]  SECRETARY  OF  THE  TREASURY.  331 

REPORT  ON  THE  FINANCES. 

DECEMBER,  1806. 


In  obedience  to  the  directions  of  the  act  supplementary  to  the  act,  entitled 
"  An  act  to  establish  the  Treasury  Department,"  the  Secretary  of  the  Trea- 
sury respectfully  submits  the  following  report  and  estimates. 

Revenue  and. Receipts. 

The  nett  revenue  arising  from  duties  on  merchandise  and  tonnage,  which 
accrued  during  the  year  1804,  amounted,  after  deducting  that  portion  which 
arose  from  the  additional  duties  constituting  the  Mediterranean  Fund,  to 

$12,673,458 
And  that  which  accrued  during  the  year  1805,  amounted,  af- 
ter making  a  similar  deduction  (as  will  appear  by  the 
statement  A.)  to  -  -  -  -    '         -      13,083,823 

It  is  ascertained  that  the  nett  revenue  which  has  accrued  during  the  three 
first  quarters  of  the  year  1806,  exceeds  that  of  the  corresponding  quarters 
of  the  year  1805;  and  that  branch  of  the  revenue  niay,  exclusively  of 
the  Mediterranean  Fund,  be  safely  estimated,  for  the  present,  at  thirteen  mil- 
lions of  dollars. 

The  statement  (B. )  exhibits  in  detail  the  several  species  of  merchandise, 
and  other  sources  from  which  that  revenue  was  collected  during  the  year 
1805. 

It  appears  by  the  statement  (C.)  that  the  sales  of  public  lands  have,  during 
the  year  ending  on  the  30th  September,  1806,  exceeded  473,000  acres. 
The  actual  payments  by  purchasers,  have,  during  that  period,  amounted  to 
850,000  dollars,  of  which  sum  near  700,000  dollars  have  been  paid  in  spe- 
cie, and  the  residue  in  stock  of  the  public  debt.  The  specie  receipts  from 
that  source  may,  after  deducting  charges,  and  the  five  percent-  reserved  for 
roads,  be  estimated  for  the  ensuing  year  at  five  hundred  thousand  dollars. 

The  receipts  arising  from  the  permanent  revenue  of  the 
United  States,  may,  therefore,  without  including  the  arrears 
of  direct  tax  and  internal  revenues,  the  duties  on  postage  and 
other  incidental  branches,  be  computed,  for  the  year  1807,  at       13,500,000 

And  the  payments  into  the  Treasury  during  the  same  year, 
on  account  of  the  temporary  duties  constituting  the  Medi- 
terranean Fund ,  are  estimated  at        -  -  -  -         1,000,000 

Making,  in  the  whole,  an  aggregate  of  $  14,500,000 

Expenditures. 

The  permanent  expenses  are  estimated  at  11,400,000  dollars,  and  consists 
of  the  following  items,  viz: 

I.  The  annual  appropriation  of  eight  millions  of  dollars,  for 
the  payment  of  the  principal  and  interest  of  the  public  debt, 
of  which  sum,  not  more  than  3,600,000  dollars,  will,  for  the 
year  1807,  be  applicable  to  the  payment  of  interest,  8,000,000 

43 


332  REPORTS  OF  THE  [1806. 

II.  For  the  Civil  Department,  and  all  domestic  expenses  of 
a  civil  nature,  including  invalid  pensions,  the  lighthouse  and 
mint  establishments,  the  expenses  of  surveying  public  lands-, 
the  fourth  instalment  of  the  loan  due  to  Maryland,  and  a 
sum  of  130,000  dollars  to  meet  such  miscellaneous  appropria- 
tions, not  included  in  the  estimates,  as  may  be  made  by  Con- 
gress, .-.--..        1,150,000 

III.  For  expenses   incident  to  the  intercourse  with  foreign 

nations,  including  the  permanent  appropriation  for  Algiers  200,000 

IV.  For  the  Military  and  Indian  Departments,  including 
trading  houses,  and  the  permanent  appropriations  for  certain 

Indian  tribes,  _--.__         1,150,000 

V.  For  the  Naval  establishment,  -  900,000 


The  extraordinary  demands  for  the  year  1807,  already  au- 
thorized by  law,  amount  to  two  millions  seven  hundred 
thousand  dollars,  viz: 

The  balance  of  the  American  claims  assumed  by  the  French 
convention,  which  remained  unpaid  on  the  30th  September  last, 
amounting  to         -  -  -  -         .   -      700,000 

And  the  two  millions  of  dollars  appropriated  by 
the  act  of  13th  February,  1806,  making  provision 
for  defraying  any  extraordinary  expenses  attending 
the  intercourse  between  the  United  States  and 
foreign  nations,  ....    2,000,000 


$  1 1,400,000 


2,700,000 


Making  altogether,  $  14, 1 00,000 

From  which  it  appears  that,  besides  a  surplus  of  four  hundred  thousand 
dollars,  the  resources  of  the  ensuing  year  will  be  sufficient  to  meet  the  cur- 
rent demands,  and  to  discharge,  without  recurring  to  the  loan  authorized  by 
the  last  mentioned  act,  the  extraordinary  appropriation  of  two  millions  for 
foreign  intercourse. 

It  is  here  proper  to  state,  that,  under  the  authority  given  by  that  act,  a 
credit  of  one  million  of  dollars  has  been  opened  in  Holland  to  the  Ministers 
of  the  United  States  appointed  to  treat  with  Spain.  Should  the  credit  be  used., 
the  million  will  be  charged  to  the  proper  appropriation:  but, although  the 
balance  chargeable  to  the  expenditure  of  the  year  1807,  will  in  that  case  be 
only  one,  instead  of  two  millions,  as  stated  in  the  above  estimate,  the  gene- 
ral result  will  be  the  same,  as  it  will  then  be  necessary  to  replace  in  Holland, 
the  million  thus  employed  for  a  different  object  than  the  payment  of  the  fo- 
reign debt,  to  which  it  now  stands  charged. 

The  balance  in  the  Treasury  amounted,  on  the  30th  day  of  September, 
1805,  to  $  4,558,664  02;  and,  on  the  30th  day  of  September,  1806,  t® 
$  5,496,969  77.  But  it.  will,  on  account  of  the  heavy  payments  to 
be  made  in  the  course  of  this  month  for  the  public  debt,  be  probably  re- 
duced, on  the  1st  January,  1807,  to  a  sum  not  much  exceeding  four  millions 
of  dollars. 

Public  Debt. 

The  annexed  note  of  the  proceedings  of  the  Commissioners  of  the  Sink- 
ing Fund,  marked  (E. )  shows  that  a  considerable  portion  of  the  annual  ap- 


1806.]  SECRETARY  OF  THE  TREASURY.  33g 

propriation  of  eight  millions  of  dollars,  was  applicable  this  year  to  the  re- 
imbursement or  purchases  of  the  domestic  debt.  No  more  than  17,517 
dollars  and  61  cents  were  offered  at  market  price,  and  accordingly  pur- 
chased. The  reimbursement  of  the  Navy  six  percent.,  amounting  to  711,700 
dollars,  was  therefore  effected  on  the  30th  day  of  September  last,  and  that 
of  the  five  and  half  per  cent,  stock,  amounting  to  1,847,500  dollars,  is  advert 
tised  for  the  first  day  of  January  next.  The  payment  of  the  last  mentioned 
sum  will  be  made  by  the  Treasury  in  the  course  of  this  month.  Although 
a  more  than  usual  portion  of  the  appropriation  for  the  calendar  year  1806, 
falls,  for  that  reason,  on  the  last  quarter,  it  appears  by  the  statement  (D.)  that 
the  payments  on  account  of  the  principal  of  the  public  debt  have,  during 
the  year  ending  on  the  30th  day  of  September,  1806,  amounted  to  near 
three  millions  two  hundred  and  fifty  thousand  dollars. 

It  appears  by  the  same  statement,  that  the  payments  on  account  of  the 
principal  of  the  public  debt,  have,  from  the  1st  April,  1801,  to  the  30th 
September,  1806,  amounted  to  ...  $21,203,9035,5 

The  payments  on  the  same  account,  to  be  made  by  the 
Treasury  in  the  course  of  this  month,  are — 

For  the  reimbursement  of  the  five  and  half 
per  cent,  stock,      -  1,847,500  00 

For  the   annual  reimbursement  of  the  six 
per  cent,  and  deferred  stocks,  -  -  99 3, 38 919 

2,840,S89   19 


24,044,792   74 


And  making  the  total  of  principal  of  the  public  debt,  reimbursed  from  the 
1st  of  April,  1801,  to  the  1st  January,  1807,  more  than  twenty-four  millions 
of  dollars. 

During  the  same  period  there  have  also  been  paid  to  Great  Britain,  in  sa- 
tisfaction and  discharge  of  the  money  which  the  United  States  might  have 
been  liable  to  pay,  in  pursuance  of  the  provisions  of  the  sixth  article  of  the 
treaty  of  1794,  two  millions  six  hundred  and  sixty-four  thousand  dollars; 
and  to  the  holders  of  bills,  drawn  by  the  Minister  of  the  United  States  at 
Paris,  on  account  of  American  claims  assumed  by  the  convention  with 
France,  a  sum  exceeding  three  millions  and  fifty  thousand  dollars;  neither  of 
which  sums  is  included  in  the  preceding  statement  of  debt  redeemed. 

As  the  only  parts  of  the  public  debt,  which  the  United  States  have  a  right 
to  reimburse  during  the  year  1807,  consist  of  the  annual  reimbursement  of 
the  six  per  cent,  and  deferred  stocks,  estimated  at  1,540,707  dollars,  and  of 
the  four  and  half  per  cent,  stock,  amounting  to  176,000  dollars,  it  will  not 
be  practicable,  unless  purchases  can  be  effected  within  the  limitations 
prescribed  by  law,  to  apply  during  that  year,  the  whole  of  the  annual  ap- 
propriation of  eight  millions  of  dollars.  The  unexpended  balance,  together 
with  the  appropriation  for  the  year  1808,  will  enable  the  United  States  to 
reimburse,  on  the  1st  of  January,  1809,  the  whole  of  the  eight  per  cent. 
stock,  which  is  irredeemable  before  that  day. 

But.  in  order  that  Congress  may  have  a  clear  view  of  the  situation  of  the 
public  debt  after  the  3^ear  1808,  and  be  enabled  to  decide  on  the  propriety 
of  making  further  legislative  provision  for  that  object,  it  appears  necessary 
to  state  distinctly:  1st,  The  operations  which  will  take  place  in  relation  to 
the  debt  during  the  years  1807  and  180S.  2dly,  The  several  species  and  ag- 
gregate of  debt  which  will  have  been  extinguished  between  the  1st  April, 


334  REPORTS  OF  THE  [1806. 

1801,  and  the  1st  January,  1809.  3dly,  The  several  species  and  aggregate  of 
debt  remaining  unpaid  on  the  last  mentioned  day.  4thly,  A  comparative 
view  of  the  revenue  and  annual  payments  on  account  of  the  debt  after  that  day. 

I.  The  payments  to  be  made  during  the  years  1807  and  1808,  on  account 
of  the  principal  and  interest  of  the  public  debt,  consists  of  the  following 
items,  viz: 

Interest  and  reimbursement  of  the  six  per  cent,  and  defer- 
red stocks,     ------  6,688,296  08 

Of  which  sum,  the  sum  required  for  interest  is  3,512,337  83 

And   the  reimbursement  of  principal  will 
amount  to      -  -  -  -  -     3,175,958  25 


$6,688,296  08 


Interest  and  charges  on  all  the  other  species  of  debt,  3,529,457  50 

Principal  of  the  eight  per  cent,  and  four  and  half  per  cent. 
Stocks,  -  -  -  -  -  -  -  6,538,400  00 


Making  altogether,  $16,756,153  5S 

That  is  to  say,  for  interest,  -  -     7,041,795  33 

And  in  reimbursement  of  principal,  -     9,714,358  25 


16,756,153  58 


This  sum  exceeds  by  only  756,000  dollars,  the  sixteen  millions  appropri- 
ated by  law  for  those  two  years,  and  that  difference  may  be  supplied,  accord- 
ing to  law,  from  the  surplusses  of  revenue  already  accrued,  which  are  suf- 
ficient for  that  purpose,  and  which  it  will  be  eligible  to  apply  in  that  man- 
ner, in  order  that  the  United  States  may  not  continue  to  pay  an  interest  of 
eight  per  cent,  any  longer  than  they  are  compelled  to  do  it,  by  the  terms 
of  the  loan. 

II.  The  amount  of  debt  redeemed  from  the  1st  of  April,  1S01,  to  the  1st 
January  next,  has  been  already  stated  to  be         -  -  \     24,044,792  74 

And  the  principal  which  will  be  reimbursed  during  the 
years  1807  and  1808,  amounts,  by  the  preceding  statement,  to      9,714,358  25 

Making,  together,  more  than  thirty-three  millions  seven 
hundred  and  fifty  thousand  dollars,   reimbursed  between 


the  1st  April,  1801,  and  the  1st  January,  1809.  $  33,759,150  99 

Which  sum  consists  of  the  following  items,  viz: 

The  whole  of  the  foreign  debt,  -  -  -10,236,108  05 

The  whole  of  the  loans  formerly  obtained  from  the  Bank 
of  the  United  States,  and  of  the  Navy  six,  five  and  half,  four 
and  half,  and  eight  per  cent,  stocks,  -  12,537,600  00 

Annual  reimbursement  of  the  six  per  cent,  and  deferred 
stocks  ------  10,631,575  67 

Payments  in  various  species  of  stock,  for  public  lands, 
stock  purchased,  and  unfunded  debt  reimbursed,         -  -     353,867  27 


$33,759,150  99 


1806.] 


SECRETARY  OF  THE  TREASURY.  335 


III.  The  debt  remaining  unpaid  on  the  1st  day  of  January, 

1809,  will  consist  of  the  following  species: 

Unredeemed   amount  of  old   six  per  cent,    and   deferred 

stocks,. reimbursable  only  at  the  rate  of  eight  per  cent,  a  year, 

(for  principal  and  interest,)  on  the  nominal  amount,  27,142,357  21 

Three  per  cent,  stock,  ....     19,019,481  56 

1796  six  per  cent,  stock,  redeemable  in  1819,    -  -  80,000  00 

Louisiana  stock,  reimbursable  in  four  annual  instalments, 

in  the  years  1818,  1819,  1820,  and  1821,  -  -      11,250,000  00 


Amounting  altogether   to  near  fifty-seven  millions  and      f 

five  hundred  thousand  dollars.  $  57,491,838  77 

The  Louisiana  stock  cannot  be  reimbursed  before  the  period  fixed  by  the 
contract.  The  gradual  operation  of  the  annual  reimbursement  will  extinguish 
the  old  six  per  cent,  in  the  year  1818,  and  the  deferred  stock  in  1824;  after 
which  year  the  only  remaining  incumbrance  will  be  the  interest  on  the 
three  per  cent,  stock,  which,  in  its  present  shape,  may  be  considered  as  ir- 
redeemable. Purchases  cannot  be  relied  upon,  as  the  application  of  even 
an  inconsiderable  sum  would  raise  the  stocks  above  the  prices  limited  by 
law.  It  follows,  that  all  the  species  of  debt  on  which  the  entire  annual  ap-? 
propriation  of  S,000  000  dollars  could  operate,  will  have  been  reimbursed 
prior  to  the  year  1809;  that  the  remaining  debt  cannot,  without  some  modifi- 
cations assented  to  by  the  public  creditors,  be  more  rapidly  or  completely 
discharged  than  is  here  stated;  and  that  the  annual  payments  on  that  account, 
will,  after  the  year  1808,  and  prior  to  the  year  1818,  be  reduced  to  the  in- 
terest and  annual  reimbursement,  amounting  to  near  4,600,000  dollars,  as 
will  more  fully  appear  by  the  annexed  table,  marked  (G. ) 

IV.  The  revenue  derived  from  customs  during  the  year  1802,  which  was 
a  year  of  European  peace,  was  much  less  in  proportion  than  that  of  any  of 
the  immediately  preceding  or  following  years,  and  yet  exceeded  ten  mil- 
lions of  dollars.  As  it  has  been  ascertained  that  the  population  of  the  Uni- 
ted States  increases  at  the  rate  of  thirty-five  per  cent,  in  ten  years,  the  re- 
venue derived  from  customs  for  the  year  1812,  may  be  estimated  at  thirteen 
millions  five  hundred  thousand  dollars:  to  which  adding  only  five  hundred 
thousand  dollars  for  the  annual  proceeds  of  the  sales  of  public  lands,  will 
give  fourteen  millions  of  dollars  for  the  total  revenue  of  that  year,  or  for 
the  average  revenue  of  the  years  1809 — 1815.  And  this  must  be  consider- 
ed as  a  very  moderate  computation,  since  it  does  not  include  the  revenue  de- 
rived from  New  Orleans;  is  predicated  on  the  supposition  that  the  wealth  of 
the  United  States  increases  in  no  greater  ratio  than  their  population;  and 
does  not  exceed  the  sum,  which,  exclusively  of  the  Mediterranean  Fund, 
was  received  last  year  into  the  Treasury. 

The  annual  payments  on  account  Of  the  public  debt,  will,  during  the  same 
period,  amount,  as- Joas, -already  been  stated,  to  4,600,000  dollars.  All  the 
other  expenses  of  the  United  States,  whether  domestic  or  foreign,  of  a  civil 
nature,  or  for  the  support  of  the  existing  military  and  naval  establishments, 
do  not  at  present  exceed  3,500,000  dollars.  The  total  annual  expenditure, 
allowing  four  hundred  thousand  dollars  a  year  for  contingencies,  "may  there- 
fore be  estimated,  after  the  year  1808,  at  eight  millions  and  a  half;  which,  de-»- 
ducted  from  a  revenue  of  fourteen  millions,  will  leave  a  nett  annual  surplus 
of  five  millions  and  a  half  of  dollars. 


336  REPORTS  OF  THE  [1806. 

The  question  now  recurs,  whether  a  portion  of  that  surplus  would  not  be 
most  advantageously  employed  in  hastening  the  reduction  of  the  debt?  Whe- 
ther some  mode  may  not  be  devised,  to  provide,  within  a  short  period,  for  its 
final  and  complete  reimbursement,  and  thereby  release  the  public  revenue 
from  every  incumbrance?  This  can  only  be  effected  by  a  modification  of 
the  debt  assented  to  by  the  public  creditors;  and  a  conversion  of  the  old  six 
per  cent  deferred,  and  three  per  cent,  stocks,  on  terms  mutual^  bene- 
ficial, into  a  common  six  per  cent,  stock,  redeemable  within  a  limited 
time,  has  appeared  the  most  simple  and  eligible,  if  not  the  only  practicable 
plan,  that  can  be  adopted.  For  its  details,  a  reference  is  respectfully  made 
to  a  letter  written  in  January  last,  to  the  Chairman  of  the  Committee  of 
Ways  and  Means,  a  copy  of  which,  marked  (F.)  is  annexed.  It  will  only 
be  necessary  to  state,  that  if  such  a  plan  should  be  sanctioned  by  Congress, 
and  accepted  by  the  creditors,  those  several  species  of  debt,  amounting,  on 
the  1st  January,  1809,  to  something  more  than  forty-six  millions  of  dollars, 
would  be  converted  into  a  six  per  cent,  stock,  amounting  to  less  than  forty 
millions  of  dollars,  which  the  continued  annual  appropriation  of  eight  mil- 
lions of  dollars  would  (besides  paying  the  interest  on  the  Louisiana  debt) 
reimburse,  within  a  period  of  less  than  seven  years,  or  before  the  end  of  the 
year  1815;  as  will  appear  by  the  table  marked  (H.) 

The  total  annual  expenditure  for  those  seven  years,  would  then,  allowing 
still  3,500,000  dollars  for  current  expenses,  and  400,000  dollars  for  contin- 
gencies, amount  to  something  less  than  twelve  millions  of  dollars;  which,  de- 
ducted from  a  revenue  of  fourteen  millions  of  dollars,  would  still  leave,  after 
the  year  1808,  a  clear  surplus  of  more  than  two  millions  of  dollars,  applica- 
ble to  such  new  objects  of  general  improvement  or  national  defence,  as  the 
legislature  might  direct,  and  existing  circumstances  require.  And,  after  the 
year  1815,  no  other  incumbrance  would  remain  on  the  revenue  than  the 
interest  and  reimbursement  of  the  Louisiana  stock,  the  last  payment  of  which, 
in  the  year    1821,   would  complete  the  final  extinguishment  of  the  public 

debt 

All  which  is  respectfully  submitted. 

ALBERT  GALLATIN, 

Secretary  of  the  Treasury* 
Treasury  Department,  December  5th,  1806. 


1806.] 


SECRETARY  OF  THE  TREASURY. 


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REPORTS  OF  THE 


[1806. 


B. 

•«#  STATEMENT  exhibiting  the  value  and  quantities,  respectively ,  of 
Merchandise  on  which  duties  actually  accrued  during  the  year  1805, 
{consisting  of  the  difference  between  articles  paying  duty,  imported, 
and  those  entitled  to  drawback,  re-exported,)  and,  also,  of  the  nett 
revenue  which  accrued,  during  that  year,  from  duties  on  Merchan- 
dise, Tonnage,  Passports,  and  Clearances. 


GOODS  PAYING  DUTIES  AD  VALOREM. 

i53 ,506, 584  dollars,  at  12£  per  cent.         -         -  - 

7,248,627         do""     15        do               -            - 

405,470          do         20         do                -             - 

Additional  duty  on  $41,537,612,  at  2$ 

)er  ct. 

verage 
do     - 

verage 
do    - 

duties 
1 could 

'ted  in 

4,188,323  00 

1,087,294  05 

81,094  00 

1,038,440  30 

A 

41,160,681 

a  Spirits,        7,641,207  gallons,  at  29.2  cents,  a 
b  Sugar,        68,046,865  pounds,  at     2.6    do 
c  Salt,              2,816,455  bushels,  at  20        do      - 
d  Wines,         2,604,611  gallons,  at  30.5     do       a 
€  Teas,            3,354,381  pounds,  at  19  9     do 
Coffee,         4,816,274       do       at     5        do      - 
Molasses,     9,226,446  gallons,  at     5        do      - 
f  All  other  articles. 

6,395,151  35 

2,232,901  85 
1,746,979  85 
563,291  00 
793,794  85 
669,190  37 
240,813  70 
461,322  30 
764,165  84 

Deduct  duties  refunded,  after  deducting  therefrom 
collected  on  merchandise,  the  particulars  of  whicl 
not  be  ascertained,  and  difference  in  calculation 

13,867,611 
26,661 

11 

88 

13,840,949  23 
328,144  79 

202,937  54 

05  per  cent,  retained  on  drawbacks 
Extra  duty  of  10  per  cent,   on  merchandise  impo 
foreign  vesbels                       •    .- 

156,430 
59,300 

35 

85 

Nett  amount  of  duties  on  merchandise   - 
Duties  on  tonnage                      "  - 
Light  money        "..... 

14,372,031  56 

215,731  20 
18,954  00 

14,606,716  76 
70,000  00 

Duties  on  passports  and  clearances 

Sundry  accounts  not  yet  received,  estimated  at    - 

- 

Gross  revenue,  as  per  statement  A 
Deduct  expenses  of  collection     -           -            - 

14,676,716  76 
554,836  76 

Nett  revenue 

14,121,880  00 

1806.] 


SECRETARY  OF  THE  TREASURY 


339 


Explanatory  Statements  and  Notes. 


A  Additional  duty  of  2£  per  cent  - 

3£  per  cent,  retained  on  drawbacks      -  -  - 

Extra  duty  of  10  per  cent,  on  merchandise  imported  in  foreign  vessels 


Spirits — 
Grain 


$1,038,440  30 
6,647  72 
6,227  15 


1,051,315  17 


2d  do 

3d  do 

4th  do 

5th  do 

6th  do 
Other  materials,  1st  &  2d  do 

3d  do 

4th  do 

5th  do 

6th  do 


1st  proof,     317,954  gallons,  at  28  cents 


8,247 

32,406 

57.544 

1,723 

43 

1,137,012 

3,061,619 

2,995,394 

29,159 

106 

7,641,207 


do 
do 
do 
do 
do 
do 
do 
do 
do 
do 


29 
31 

34 
40 
50 
25 
28 
32 
38 
46 


do 
do 
do 
do 
do 
do 
do 
do 
do 
do 


b    Sugar- 
Brown, 
White, 


-  58,885,220  pounds,  at  2£  cents 

-  9,161,645        do  3       do 


68,046,865 


c    Salt,  imported,  bushels  of  56  pounds  -        3,782,328 

Exported,     -  -  12,503 

Amount  of  bounties  and  allow- 
ances, $190,674  04,  reduced 
into  bushels  at  the  present  rates,  953,370 


Paying  duty,  bushels  of  56  pounds; 

Wines — 

Madeira,  1st  quality, 

2d      do 
Sherry  and  St.  Lucar, 
Oporto  and  Lisbon, 
Burgundy  and  Champaign, 
Teneriffe,  Fayal,  and  Malaga, 
Other,  in  bottles, 
Do    in  casks, 


Teas— 

Bohea,  - 

Souchong, 
Hyson, 
Other  green, 

Extra  duty  on  teas  imported  from 
other  places  than  India, 


89,027  12 

2,391  63 

10,045  86 

19,564  96 

689  20 

21  50 

284,253  00 

857,253  32 

958,526  08 

11,080  42 

48  76 


2,232,901  85 


1,472,130  50 
274,849  35 


1,746,979  85 


JVJJ,o 

cents 
cents 

mds; 

2,816,455  at  20 
gallons,  at  58 

563,291  00 

206,159 

119,572  22 

2,909 

do 

50 

do 

1,454  50 

303,135 

do 

40 

do 

121,254  00 

293,734 

do 

30 

do 

88,120  20 

3,931 

do 

45 

do 

1,768  95 

816,621 

do 

28 

do 

228,653  88 

66,692 

do 

35 

do 

23,342  20 

911,430 

do 
pounds, 

23 
at  12 

do 
cents 

209,628  90 

2,604,611 

793,794  85 

461,516 

55,381  92 

1,144,223 

do 

18 

do 

205,960  14 

478,924 

do 

32 

do 

153,255  68 

1,269,718 

do 

20 

do 

253,943  60 

* 

- 

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3,354,381 

669,190  37* 

44 


340 


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1806.] 


SECRETARY  OF  THE  TREASURY. 


345 


D. 

AN  ESTIMATE  of  the  Principal  redeemed  of  the  Debt  of  the  United 
States,  from  1st  October,  1805,  to  30th  September,  1806 ,  inclusive; 
showing  the  redemption  of  the  Principal  of  the  said  Debt,  from  1st 
April,  1801,  to  30th  September,  1806. 


On  account  of  the  Domestic  Debt. 

The  amount  of  warrants  issued  on  the  Treasurer 
of  the  United  States,  on  account  of  the  interest 
of  the  domestic  debt,  and  of  the  reimburse- 
ment or  purchases  of  the  old  six  per  cent,  and 
deferred  stocks,  from  1st  October,  1805,  to 
30th  September,  1806,  was  $4,476,047  88 
Deduct  interest  which  accrued 
during  the  same  period,  cal- 
culated quarter  yearly 

3,154,343  16 
Prom  which  deduct 
gain  on  purchases  437  96  b 

3,153,905  20 


Reimbursement  of  the  Navy  six  per  cent,  stock 

Payments  made  in  certificates  of  the  debt  of  the 
United  States,  on  account  of  lands 

Payments  made  to  foreign  officers,  and  for  cer- 
tain parts  of  the  domestic  debt 

Payments  on  account  of  domestic  loans 

On  account  of  the  Foreign  Debt. 

The  amount  of  warrants  issued  on  the  Treasurer, 
exclusive  of  $5,950  repaid  into  the  Treasury, 
and  $5,668  52,  the  commissions  to  agents 
purchasing  bills  of  exchange,  was$l,  803,765  06 

Deduct  interest  accruing  thereon, 
viz: 

On  the  Dutch  debt,  including  com- 
missions and  charges     115,474  00 

On  the  Louisiana  stock, 
including  commissions  678,073  50 


793,547  50 
Deduct    gain    on    ex- 
change -  37,430  21 


756,117  29 


Redemption 
from  1st  Oc- 
tober, 1805, 
to  30th  Sep- 
tember, 1806. 


1,322,142  68« 
711,700  00 

167,400  35 

222  26 


1.047,647  77 


Dollars  '3,249,113  06 


Redemption 
from  1st  April, 
1801,  to  30th 
Sept'r,  1805, 
per  the  Secre 
tary's  report  of 

he  9th  Dec'r, 
1805. 


5,157,603  16 


94,617  81 

74,109  24 
3,440,000  00 


Total  princi- 
pal redeem- 
ed, from  1st 
April,  1801, 
to  30th  Sep- 
tember, 1806. 


6,479,745  84. 
711,700  00 

262,018  16 

74,331  56 
3,440,000  00 


9,188,460  28 


17,954,790  49 


10,236,108  05 
21,203,90355 


a    Viz: 


Six  per  cent,  and  deferred  stocks  purchased 
On  account  of  reimbursement  of    do 


17,517  61 
-     1,304,625  07 

1,322,142  68 

b    The  unredeemed  amount  of  six  per  cent,  and  deferred  stock  purchased,  was    ,;17,517  61 
Paid  for  at  97£  per  cent.  ......  17,07965 


Gain 


437  96 


Treasury  Department,  Register's  Office,  21th  November,  1806. 

JOSEPH  NOURSE,  Register. 


! 


346  REPORTS  OF  THE  [1806. 


E. 

At  a  meeting  of  the  Commissioners  of  the  Sinking  Fund,  6n  the  28th  day 
of  April,  1806 — Present: 

James  Madison,  Secretary  of  State. 

Albert  Gallatin,  Secretary  of  the  Treasury. 

John  Breckenridge,  Attorney  General. 

The  Secretary  of  the  Treasury  laid  hefore  the  Board  a  report,  dated  the 
26th  of  April,  1806,  which  was  read,  and  is  as  follows: 

"That  the—current  payments  to  be  made  by  the  Commissioners  of  the 
Sinking  Fund,  during  the  year  1806,  are  estimated  as  followeth,  viz: 

Reimbursement  and  interest  on  the  domestic  debt      -  -     $  4,585,000 

Instalments  and  interest  on  the  Dutch  debt,  payable  from  the 
1st  January  to  the  1st  June,  1807,  and  which  must,  there 
fore,  be  remitted  in  1806  -  -    ■         -  -         1,004,032 

One  year's  interest  on  the  Louisiana  stock    -  678,375 


Amounting,  altogether,  to     -             -             -.             -             -  6,267,407 
And  leaving,  in  order  to  complete  the  annual  appropriation  of 

eight  millions  of  dollars,  a  sum  exceeding  one  million  seven  1,732,593 

hundred  and  thirty  thousand  dollars,  (exclusively  of  the  in- 

terest  which  may  be  redeemed  by  the  payment  of  said  sum,) 

to  be  applied  in  such  manner  as  the  Board  shall  direct.  8,000,000 


"  That  the  said  sum  may  be  applied  either  to  reimbursements  or  purchases 
of  the  public  debt. 

"  That  the  only  portions  of  the  debt  which  may  be  reimbursed,  are: 

The  Navy  six  per  cent,  stock,  amounting  to  -  $711,700 

The  five  and  a  half  per  cent,  stock,  amounting  to  -         1,847,500 

And  the  four  and  a  half  per  cent,  stock,  amounting  to  -  176,000 

"  And  that  it  is  now  submitted,  whether,  previous  to  advertising  the  reim- 
bursement of  the  five  and  a  half  per  cent,  stock,  it  might  not  be  adviseable 
to  ascertain  whether  a  more  advantageous  application  may  be  effected  by 
purchases  in  the  manner  authorized  by  law." 

Whereupon,  it  was  Resolved, 

1.  That  the  sum  which,  after  making  the  current  payments  mentioned  in 
the  preceding  report,  shall  remain  to  complete  the  annual  appropriation  of 
eight  millions  of  dollars,  be  applied  in  the  following  manner,  viz. — First, 
to  the  purchase  of  the  eight  per  cent. ,  old  six  per  cent.,  and  deferred  stocks, 
at  a  price  not  exceeding  the  rates  fixed  by  law;  giving  the  preference,  in  the 
first  place,  to  the  eight  per  cent,  and,  in  the  next  place,  to  the  deferred  stock, 
provided  that  the  President  of  the  United  States  shall' assent  to  such  applica- 
tion. And,  secondly,  in  case  that  a  sufficient  quantity  of  stock  cannot  be 
purchased,  to  the  reimbursement  of  the  Navy  six  per  cent,  stock,  and  at  the 


lS06.]  SECRETARY  OF  THE  TREASURY.  ^47 

option  of  the  Secretary  of  the  Treasury,  either  to  the  reimbursement  of  the 
five  and  a  half  per  cent,  stock,  or  of  so  much  of  the  bills  drawn  on  the  Trea- 
sury by  the  Minister  of  the  United  States  at  Paris,  in  conformity  with  the 
Convention  between  France  and  the  United  States,  of  the  30th  of  April, 
1803,  as  will  be  necessary  to  complete  the  payment  of  the  said  eight  millions 
of  dollars. 

2.  That  the  Treasurer  of  the  United  States  be  the  agent,  under  the  super- 
intendence of  the  Secretary  of  the  Treasury,  for  making  the  said  purchases; 
that  the  said  purchases  be  made  by  receiving  sealed  proposals  for  any  sums 
which  maybe  offered;  and  that  the  said  agent  forthwith  advertise  to  receive 
such  proposals,  until  the  13th  day  of  June  next  inclusively. 

3.  That  notice  of  the  reimbursement  of  such  stocks  as  may  be  reimbursed, 
be  given  by  the  Secretary  of  the  Treasury,  prior  to  the  1st  day  of  July  next, 
and  that  the  date  of  reimbursement  be,  at  his  option,  either  the  first  day  of 
October,  or  the  first  day  of  January  next. 

(Signed,) 

JAMES  MADISON,  Secretary  of  State. 

ALBERT  GALLATIN,  Secretary  of  the  Treasury. 

JOHN  BRECKENRIDGE,  Attorney  General  U.  S. 
Attest: 
Edward  Jones,  Secretary  to  the  Com?nissioners  of  the  Sinking  Fund*. 


F. 

Treasury  Department,  January  20th,  1806. 

Sir:  I  had  the  honor,  in  my  letter  of  the  28th  ultimo,  to  suggest  that  a 
conversion  of  the  old  six  per  cent,  deferred,  and  three  per  cent,  stocks  into 
a  new  six  per  cent,  stock,  would  promote  the  intention  of  the  Legislature 
to  extinguish,  within  a  fixed  period,  the  whole  debt  of  the  United  States. 
For  a  better  understanding  of  the  subject,  a  recapitulation  of  the  several  spe- 
cies of  stock,  which,  on  the  first  day  of  this  year,  constituted  the  public  debt, 
is  necessary.  The  first  class  embraces  the  several  species  of  debt,  reim- 
bursable on  or  before  the  1st  day  of  January,  1809,  viz: 

Dutch  Debt. 

I.   The  amount  of  principal  remaining  unpaid  on 

the  31st  of  December,  1S05,      -  Guilders    5,500,000 

Of  which  there  had  been  remitted,  previous  to  that 
day,  in  addition  to  the  interest  of  the  year  1806, 
a  sum  more  than  sufficient  to  discharge  all  the 
instalments  payable  in  the  same  year,  and 
amounting  to  -  -  -  -     2,000,000 

Leavingfor  the  balance  of  principal  unprovided  for,   3,500,000      $1,400,000 
Nine  hundred  and  twenty  thousand  dollars  of  that 

sum  fall  due  in  the  year  1807,  and  the  residue 

is  payable  in  two  equal  instalments,  of  240,000 

dollars  each,  on  the  1st  days  of  February,  180S, 

and  18Q9.     The  whole  amount,  therefore,  will 


348  REPORTS  OF  THE  [1806. 

have  been  paid  by  the  Treasury,  before  the  end 
of  the  year  1808. 

II.  Eight  per  cent,  stock,  irredeemable  till  after 
the  year  1808. 

'  The  original  amount  of  that  stock  was  -        $6,480,400 

Of  which  had  been  paid,  in  payment  for  public 

lands,  prior  to  the  1st  of  January,  1806,  -  50,900 

Leaving  the  amount  unredeemed,  -  -  $6,429,500' 

Partial  purchases  may,  perhaps,  be  effected  within 

the  limitations  prescribed  by  Congress,  during 

this   and  the  two   ensuing  years;  and,    at   all 

events,  the  whole  will  be  reimbursed  on  the  1st 

day  of  January,  1809. 

III.  Debts   reimbursable   at   the  pleasure  of  the 
United  States,  viz: 

Navy  six  per  cent,  stock,  -  ,  ~  -         711,700 

Five  and  a  half  do  -  1,847,500 

Four  and  a  half  do  -  176,000 


Which  will  also  be  reimbursed  before  the  year 
1809,  unless  the  price  of  stocks  should  render  it 
more  advantageous  to  purchase  some  other  spe- 
cies of  the  debt. 

The  second  class  consists  of  debts  payable  at  more 
distant  periods,  which  it  does  not  appear  practi- 
cable to  anticipate,  viz^ 

I.  1796  six  per  cent,  stock  redeemable  in  1819,  80,000 

II.  Louisiana  stock,  redeemable  in  four  annual  in- 
stalments,  the   first   of    which   is  payable    in 

1818,  -  -  -  -  -11,250,000 


2,735,200 
10,564,700 


The  old  six  per  cent,  deferred,  and  three  per  cent, 
stocks,   constitute  the  last  class,  and  amount  to 


11,330,000 


the  following  sums: 


The  nominal  amount  of  six  per  cent,  is  -  -  28,180,000 

Of  deferred  do  -  13,560,000 


41,S40,000 
Of  which  has  been  redeemed,  by  the  annual  reim- 
bursement of  eight  per  cent,  on  account  of  prin- 
cipal and  interest,  (omitting  fractions,)  viz: 
On   the  six  per    cent,   stock,  at  the 

rate  of  30.16  per  100  dollars,  -       8,500,000 

On  the  deferred  stock,  at  the  rate  of 

11.  30  per  100  dollars,     -  -       1,540,000 

10,040,000 


Leaving  the  unredeemed  amount  on  1st  January, 

1806^  (in  round  numbers,)  -  -31,800,000 


1806.]  SECRETARY  OF  THE  TREASURY.  349 

The  nominal  amount  of  three  per  cent,  (in  round 
numbers  also,)  -  *  -  $19,050,000 

50,850,000 


Total  amount  of  the  public  debt,  §72, 744,700 

Although  the  old  six  per  cent,  and  deferred  stocks,  are  still  considered  as 
a  six  per  cent,  stock,  they  are  both,  in  fact,  an  annuity  of  eight  per  cent,  on 
the  original  nominal  amount,  which,  extinguishing  the  principal  by  degrees, 
will  cease  for  the  old  six  per  cent,  in  the  year  1818,  and  for  the  deferred  in 
1824.  A  certificate  of  six  per  cent,  stock,  of  one  hundred  dollars  nominal, 
was  considered  on  the  1st  January,  1806,  as  equal  to  sixty-nine  dollars  and 
ninety-four  cents,  real  six  per  cent,  stock,  because  thirt)'  dollars  and  sixteen 
cents  of  the  principal  had  been  discharged  by  the  annual  reimbursement  of 
eight  per  cent,  instead  of  which,  it  was,  properly  speaking,  an  annuity  "of 
eight  dollars  for  twelve  years  and  something  less  than  nine  months.  And, 
in  the  same  manner,  a  certificate  of  deferred  stock,  of  one  hundred  dollars 
nominal,  was  considered  as  equal  to  eighty-eight  dollars  and  seventy  cents, 
real  six  per  cent,  stock,  instead  of  which,  it  was,  strictly  speaking,  an  annuity 
of  eight  dollars  for  eighteen  years  and  something  less  than  nine  months. 

The  proposition  now  submitted  to  the  Committee  of  Ways  and  Means,  is., 
that  in  exchange  for  the  present  six  per  cent,  and  deferred,  a  common  six  per 
cent,  stock  shall  be  offered  to  the  public  creditors,  equal  in  amount  to  the 
unredeemed  amount  of  the  present  stocks,  and  redeemable  at  the  pleasure  of 
the  United  States:  Provided,  however,  that  no  partial  payment  shall  be 
made  on  any  new  certificate  or  credit,  but  that  government  shall  be  obliged 
to  reimburse,  at  a  single  payment,  the  whole  amount  of  each  such  new  cer- 
tificate or  credit,  and  to  give  previous  reasonable  notice  of  such  intended  re- 
imbursement. Although  peculiar  circumstances  may  prevent  a  general  ac- 
ceptance of  that  proposal,  the  exchange  would  certainly  be  advantageous  to 
the  creditors.  Because,  1st,  it  is  difficult  to  calculate,  and  inconvenient  to 
reinvest,  four  times  in  each  year,  the  portion  of  principal  reimbursed,  which 
makes  part  of  the  quarterly  dividend ;  and  every  stockholder  who  does  not  fully 
thus  reinvest,  insensibly  consumes  his  capital.  2dly,  An  annuity  fora  limited 
term  of  years,  is  uniformly  sold  at  market  for  a  price  less  than  its  intrinsic 
or  arithmetical  worth,  as  may  be  exemplified  by  the  market  value  of  every 
lease,  and  of  every  estate,  less  than  the  absolute  fee.  For  that  reason,  the 
Navy  six  per  cent,  which  is  redeemable  at  the  pleasure  of  the  United 
States,  has  always  been  worth,  at  market,  something  more  than  the  old 
six  per  cent,  and  deferred  stocks;  and  these  in  England,  do  not  even  com- 
mand a  higher  price  than  the  American  five  and  a  half  percent,  stock,  which 
is  also  redeemable  at  will.  3dly,  The  time  and  manner  in  which  the  new 
stock  would  be  reimbursed,  would,  as  far  as  it  is  practicable,  prevent  any 
great  fluctuation  in  its  price,  and  fix  its  market  value  at  par. 

The  exchange  would  also  be  advantageous  to  the  public.  1st,  Because 
government  will  thereby  be  enabled  to  reimburse  the  whole  in  less  than 
nine  years  instead  of  eighteen.  And,  2dly,  because,  supposing  that  cir- 
cumstances should  render  a  resort  to  loans  necessary,  the  terms  on  which 
these  may  be  obtained,  will,  in  a  considerable  degree,  depend  on  the  price 
of  the  existing  stocks.  It  is  therefore  desirable  that  that  species,  the  price- 
1  of  which  has  a  tendency  to  regulate  that  of  all  others,  should  be  os  wNiahle 


350  REPORTS  OF  THE  [1806. 

as  its  rate  of  interest  will  admit;  and  it  has  already  been  stated,  that  the 
present  six  per  cent.,  and  deferred  stocks,  being  an  annuity  for  a  number  of 
years,  are  generally  worth  less  than  their  intrinsic  value.  It  is  believed  that 
that  effect  was  sensibly  felt,  in  the  operations  connected  with  the  purchase 
of  Louisiana. 

The  advantages  of  the  proposed  conversion  being  reciprocal,  no  sacrifice 
should  be  made  by  the  United  States,  in  order  to  ensure  the  assent  of  the 
public  creditors;  those  who  may  refuse  it,  will  continue  to  receive  the  eight 
per  cent,  annuities,  and  these  will,  as  has  been  stated,  cease  in  the  years 
1812  and  ISIS.  It  appears,  however,  proper  that  such  remaining  annuities 
should  be  designated  by  their  proper  name,  instead  of  carrying  on  the  face  of 
the  certificates  of  stock,  the  deceptive  appearance  of  a  six  per  cent,  stock. 
The  annexed  printed  table,  exhibiting  the  amount  of  principal  redeemed 
on  the  first  day  of  each  quarter,  shows  the  difficulty  to  persons  not  well 
versed  in  those  transactions,  of  calculating  the  true  nominal  value  or  unre- 
deemed amount  of  a  stock  which  is  perpetually  diminishing,  whilst  its  appa- 
rent nominal  amount  still  remains  the  same.  It  may  easily  be  understood, 
how  it  may,  in  some  instances,  happen,  that  the  stockholder  .consumes  his 
principal,  whilst  he  supposes  that  he  is  only  living  on  the  interest;  and  how 
it  does  sometimes  happen,  that  ignorant  purchasers,  thinking  that  the  whole 
apparent  nominal  amount,  as  expressed  on  the  face  of  the  certificate,  is  still 
due  by  the  United  States,  are  induced  to  pay  for  stock  more  than  its  real 
value. 

It  is  therefore  proposed,  that  it  should  be  enacted  by  law,  that  in  every 
case,  where  it  shall  be  necessary  to  issue  new  certificates,  either  in  lieu  of 
such  as  may  be  lost,  or  destroyed,  or  by  reason  of  a  transfer  of  the  property 
itself,  or  from  the  books  of  one  office  to  those  of  another;  the  new  certificate 
should,  on  the  face  thereof,  express  the  true  amount  of  the  annuity  due,  and 
of  the  time  when  it.  shall  cease,  instead  of  stating,  as  at  present,  the  nominal 
amount  of  the  stock  which  was  originally  due. 

A  conversion  of  the  three  per  cent,  into  the  six  per  cent,  stock,  cannot  be 
so  easily  effected;  nor,  indeed,  without  some  apparent  sacrifice  on  the  part  of 
the  United  States. 

A  three  per  cent,  will  always  be  worth  more  at  market  than  a  six  per 
cent,  stock,  which  produces  an  equal  interest. 

1st.  Because  there  is  a  possibility  that  its  nominal  amount  may  ultimately 
he  reimbursed. 

2dly.  Because,  supposing  it  to  be  a  perpetual  annuity,  the  principal  of 
which  shall  never  be  reimbursed,  its  market  price  is  regulated,  not  only  by 
the  legal  or  market  rate  of  interest  in  America,  but  by  the  price  of  similar 
foreign  stocks,  and  by  the  demand  for  American  stocks  in  foreign  countries. 
More  than  eleven  millions  of  dollars  of  the  American  three  per  cent,  stock, 
are  held  bjr  persons  residing  in  England,  Holland,  and  other  foreign  coun- 
tries. That  stock  is  never  worth  less  than  sixty  per  cent,  of  its  nominal 
amount,  when  the  old  six  per  cent,  stock  is  at  par.  It  cannot,  therefore,  be 
expected,  tliat  the  holders  will  assent  to  any  modification  which  will  not 
secure  to  ihcm  advantages  at  least  equal  to  those  they  now  possess;  and  the 
question  to  be  decided  by  the  committee  and  by  Congress,  is,  whether  that 
debt  shall  henceforth  be  considered  as  a.  perpetual  incumbrance  on  the  na- 
tion, or  whether  such  a  compensation  shall  be  offered  to  the  creditors,  as  may 
induce  them  to  accept  a  conversion  which  will  secure  the  object  heretofore 
c-onicmplatcd — the  total  extinguishment  of  the  American  debt.     It  may  no.fc 


1806.]  SECRETARY  OF  THE  TREASURY.  35 1 

be  improper  to  add,  that  even  to  those  who  may  think  the  accomplishment 
of  that  object  either  unimportant  or  impracticable,  and  taking  into  consid- 
eration such  a  state  of  things  as  may  render  new  loans  necessar}r,  the  ex- 
istence of  a  three  per  cent,  stock  is  ineligible.  To  a  nation  already  encum- 
bered with  an  immense  debt,  and  subject,  on  account  of  her  relative  situa- 
tion, to  peace  and  war  establishments  of  great  magnitude  and  corresponding 
expense,  the  annual  sum  which  it  may  be  necessary  to  pay,  in  order  to  ob- 
tain extraordinary  resources,  becomes  the  primary  consideration;  and  that 
species  of  stock  which,  in  proportion  to  its  rate  of  interest,  is  the  most  valua- 
ble at  market,  will  naturally  be  created.  The  political  and  geographical 
situation  of  the  United  States,  permits  at  least  a  hope,  that,  under  every  con- 
tingency, the  reimbursement  of  the  debts  which  may  necessarily  be  incur- 
red, will,  at  a  subsequent  period,  be  attainable,  and  that  the  principal  will 
not  be  increased  for  the  sake  of  diminishing  the  intermediate  payments  of 
interest.  As  the  ultimate  value  which  a  three  per  cent,  stock  may  reach  at 
market,  has  natural  limits,  and  the  probability  of  its  reaching  that  value 
rests  on  uncertain  contingencies,  it  is  presumable  that  the  assent  of  the  cre^- 
ditors  may  be  obtained  on  reasonable  terms,  and  no  greater  sacrifice  should 
certainly  be  made  than  the  advantages  expected  from  the  operation  will  jus- 
tify. In  appreciating  the  value  of  the  new  six  per  cent,  stock,  which  the 
creditors  would  receive,  not  only  its  nominal  amount,  but  also  the  addition- 
al annuity  which  will  be  payable  till  the  stock  shall  be  reimbursed,  must  be. 
taken  into  consideration.  It  will,  on  that  account,  be  eligible  to  provide  that 
it  shall  not  be  redeemable  till  after  all  the  eight,  five  and  a  hah,  four  and  a 
half,  and  Navy  six  per  cent,  stocks,  as  well  as  all  the  stock  which  may  be 
created  in  exchange  of  the  old  six  per  cent,  and  deferred  stocks,  shall  have 
been  reimbursed:  a  period  which,  supposing  no  adverse  circumstances  to  in- 
tervene, may  be  estimated  at  about  eight  )^ears.  Thus,  supposing  the  three 
per  cent,  to  be  converted  into  a  six  per  cent,  stock,  at  the  rate  of  sixty  per 
cent,  of  its  nominal  amount,  the  creditor  would,  at  the  end  of  eight  years,  re- 
ceive sixty  dollars,  and,  in  the  meanwhile,  an  annuity  of  three  dollars  and 
sixty  cents,  instead  of  three  dollars,  which  he  now  receives;  both  which 
provisions  may  be  considered  as  nearly  equal  to  a  redemption  at  the  rate  of 
sixty-five  dollars.  It  may  be  added,  that  this  new  stock  would  be  worth 
more  at  market  than  the  six  per  cent,  created  in  exchange  of  the  old  six  per 
cent,  and  deferred,  and  probably  more  than  par.  The  Louisiana  stack,, 
which  is  irredeemable  for  twelve  3^ears,  is  now  worth,  in  England,  one 
hundred  and  five,  whilst  the  old  six  per  cent,  is  only  at  ninety-five 
per  cent.  Whatever  reasonable  rate  may  be  paid  for  the  proposed  conver- 
sion, the  United  States  will  provide,  at  a  fixed  price,  for  the  redemption  of 
the  debt;  and  the  creditor,  besides  receiving  an  intermediate  additional  in- 
terest, will  exchange  the  uncertain  contingency  of  a  supposed  increase  of 
value  for  the  certainty  of  a  reimbursement,  greater  than  the  highest  price 
which  the  three  per  cent,  stock  has  ever  yet  reached.  It  has  already  been 
stated,  that  more  than  eleven  millions  of  dollars  of  the  three  per  cent,  stock, 
are  held  by  persons  residing  in  foreign  countries.  About  fourteen  millions 
of  the  unredeemed  amount  of  the  six  percent,  and  deferred  stocks,  are  in  the 
same  situation.  As  it  will  be  more  difficult  to  obtain  the  assent  of  that  class 
of  stockholders,  particularly  as  relates  (o  the  three  per  cent,  stock,  it  might 
also  be  agreed  that  the  interest  due  to  them  on  the  new  stock,  should,  like 
that  on  the  Louisiana  stock,  bepaid  in  Europe:  a  provision  which,  without 
costing  much- to  the  United  States,  will  be   a  strong  inducement  in.  favor  o£ 


352  REPORTS  OF  THE  J"1806. 

the  proposed  modifications.  Nor  would  it  be  impracticable  to  provide  for 
an  exchange  of  certificates  in  Europe,  which  would  remove  the  objection 
arising  from  the  delays  and  dangers  incident  to  a  double  transmission  of  pa- 
pers across  the  Atlantic.  Some  subordinate  details  may  be  introduced  in 
the  law;  but  these  outlines  will  be  sufficient  to  convey  an  idea  of  the  plan 
which  appears  to  be  the  most  simple  and  cheapest  mode  of  effecting  the  ob- 
ject contemplated.  Still  it  is  less  the  plan  thus  respectfully  submitted,  than 
the  subject  itself,  which  I  have  been  desirous  of  bringing  under  the  consid- 
eration of  the  committee.  Although  an  ample  appropriation  has  been  made 
for  the  extinguishment  of  the  whole  of  the  public  debt,  the  nature  of  the 
greater  part  of  the  stock  will,  unless  some  modification  shall  be  obtained, 
preventor  considerably  retard  the  accomplishment  of  that  object.  If  no  al- 
teration shall  take  place  in  the  nature  of  that  stock,  the  Commissioners  of  the 
Sinking  Fund  will,  after  the  year  1809,  have  no  other  means  of  applying 
near  one-half  of  the  annual  appropriation,  than  by  making  purchases.  An- 
nual purchases  to  the  amount  of  near  four  millions  of  dollars,  would  neces- 
sarily raise  the  old  six  per  cent,  and  deferred  stocks  above  par,  and  the 
three  per  cent,  stock  to  the  highest  price  of  which  it  is  susceptible.  As 
a  necessary  consequence,  the  Commissioners  would  cease  to  purchase;  and 
without  any  real  advantage  being  obtained  by  the  creditors,  the  United 
States  would  continue  to  be  encumbered  for  a  number  of  years,  with  the 
eight  percent.,  and  in  perpetuity  with  the  three  per  cent  annuities.  Years, 
perhaps  the  most  favorable  for  the  extinguishment  of  the  debt,  would  elapse, 
and  periods  might  follow  when  the  pressure  of  the  annual  payments  would 
be  sensibly  felt.  To  improve  the  present  time,  appears  the  most  provident 
course;  will,  it  is  believed,  conform  with  the  public  opinion,  and  is  most 
consistent  with  the  former  acts  of  the  Legislature. 
I  have  the  honor  to  be, 

Very  respectfully,  Sir, 

Your  obedient  servant, 
(Signed,)  ALBERT  GALLATIN. 

Hon.  John  Randolph, 

Chairman  of  the  Committee  of  Ways  and  Means. 


1806.] 


SECRETARY  OF  THE  TREASURY. 


353 


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1806.] 


SECRETARY  OF  THE  TREASURY. 


355 


H. 

A  TABLE  of  the  annual  payments  on  account  of  the  Public  Debt, 
from  the  year  1809  to  the  year  1821,  on  the  supposition  that  the  old 
six  per  cent,  deferred,  and  three  per  cent,  stocks  shall  be  converted  into 
a  new  six  per  cent,  stock,  redeemable  within  seven  years;  and  that  the 
annual  appropriation  of  eight  millions  of  dollars  shall  be  continued 
till  the  final  reimbursement  of  that  new  stock. 


Years. 

Proposed  6  per  cent,  stock,  issued 
in  exchange  for  the  old  6  per  cent, 
deferred,  and  3  per  cent,  stock. 

Louisiana  and  1796  six  per 
cent,  stocks. 

Total  in  each 

year. 

Interest. 

Principal. 

Interest 

Principal. 

1809 

2,370,301 

4,944,899 

684,800 

8,000,000 

1810 

2,073,607 

5,241,593 

684,800 

- 

8,000,000 

1811 

1,759,112 

5,556,088 

684,800 

- 

8,000,000 

1812 

1,425,747 

5,889,453 

684,800 

- 

8,000,000 

1813 

1,072,379 

6,242,821 

684,800 

- 

8,000,000 

1814 

697,810 

6,617,390 

684,800 

- 

8,000,000 

1815 

225,575 

5,012,776 

684,800 

- 

5,923,151 

1816 

- 

- 

684,800 

- 

684,800 

1817 

- 

- 

684,800 

. 

684,800 

1818 

- 

- 

684,800 

2,812,500 

3,497,300 

1819 

- 

-  . 

514,800 

2,892,500 

3,407,300 

1820 

- 

- 

340,000 

■  ,'2,812,500 

3,152,500 

1821 

- 

- 

170,000 

2,812,500 

a  2,982,500 

a  The  whole  of  the  public  debt  will  then  have  been  completely  reimbursed. 


K. 

COMPARATIVE  VIEWofthe  Annual  Payments  to  be  made  on  ac 
count  of  the  Principal  and  Interest  of  the  Public  Debt,  after  the  year 
1808,  agreeably  to  the  principles  assumed  in  the  two  preceding  tables, 
marked  G  and  H. 


Annual  payments,  agreea- 

Annual payments,  agreea- 

bly to  table  G. 

bly  to  table  H. 

1809 

4,599,531 

8,000,000 

1810 

4,599,531 

8,000,000. 

1811 

4,599,531 

8,000,000 

1812 

4,599,531 

8,000,000 

1813 

4,599,531 

8,000,000 

1814 

4,599,531 

8,000,000 

1815 

4,599,531 

5,923,151 

1816 

4,599,531 

684,800 

1817 

4,599,531 

684,800 

1818 

6,424,836 

3,497,300 

1819 

5,070,539  ' 

3,407,300 

1820 

4,815,739 

3,152,500 

1821 

4,645,739 

2,982,500 

1822 

1,663,239 

The  whole  debt  extin- 

1823 

1,663,239 

guished. 

1824 

1,184,151 

After  1824,  in  perpetuity 

570,583 

46 

356  REPORTS  OF  THE  [1807. 


REPORT  ON  THE  FINANCES. 

NOVEMBER,  1807. 


In  obedience  to  the  directions  of  the  act  supplementary  to  the  act,  enti- 
tled "  An  act  to  establish  the  Treasury  Department,"  the  Secretary  of  the 
Treasury  respectfully  submits  the  following  report  and  estimates. 

Revenue  and  Receipts. 

The  nett  revenue  arising  from  duties  on  merchandise  and  tonnage,  which 
accrued  during  the  year  1805,  amounted  to  $  14,135,138 

And  that   which  accrued  during  the  year  1806,  amount- 
ed, as  will  appear  by  the  statement  (A.)  to  $  16,576,454 


The  same  revenue,  after  deducting  that  portion  which 
arose  from  the  duty  on  salt,  and  from  the  additional  duties  con- 
stituting the  Mediterranean  Fund,  amounted,  during  the  year 
1805,  to        .-  -  -  -  -  -      12,520,532 

And  during  the  year  1806,  to  -  -  -      14,809,758 

It  is  ascertained  that  the  nett  revenue,  which  has  accrued  during  the  three 
first  quarters  of  the  year  1807,  exceeds  that  of  the  corresponding  quarters 
of  the  year  1806;  and  that  branch  of  the  revenue  may,  exclusively  of  the 
duty  on  salt,  and  of  the  Mediterranean  Fund,  both  of  which  expire  on  the 
first  day  of  January  next,  be  safely  estimated  for  the  present,  and  if  no 
change  takes  place  in  the  relations  of  the  United  States  with  foreign  nations, 
at  fourteen  millions  of  dollars. 

The  statement  (B. )  exhibits  in  detail  the  several  species  of  merchandise, 
and  other  sources,  from  which  that  revenue  was  collected  during  the  year 
1806. 

It  appears  by  the  statement  (C. )  that  the  sales  of  the  public  lands  have, 
during  the  year  ending  on  the  30th  September,  1807,  exceeded  284,000 
acres.  Some  returns  are  not  yet  received;  and  the  proceeds  of  sales  in  the 
Mississippi  Territory,  being,  after  deducting  the  surveying  and  other  inci- 
dental expenses,  appropriated  in  the  first  place  to  the  payment  of  a  sum  of 
1,250,000  dollars  to  the  State  of  Georgia,  have  not  been  included,  but  are 
distinctly  stated.  The  actual  payments  by  purchasers,  have,  during  the 
same  period,  exceeded  680,000  dollars;  and  the  receipts  into  the  Treasury 
from  that  source,  may,  after  deducting  charges,  and  the  five  per  cent,  re- 
served for  roads,  be  estimated  for  the  ensuing  year  at  five  hundred  thousand 
dollars. 


1807.]  SECRETARY  OF  THE  TREASURY.  357 

The  receipts  arising  from  the  permanent  revenue  of  the  United  States, 
may,  therefore,  without  including  the  duties  on  postage,  and  other  incidental 
branches,  be  computed,  for  the  year  1808,  at     -  -  $14,500,000 

And  the  payments  into  the  Treasury  during  the  same  year, 
on  account  of  the  salt  and  Mediterranean  duties  previously 
accrued,  are  estimated  at  -  -  *  -  1,300,000 

Making  in  the  whole  an  aggregate  of  $  15,800,000 

Last  Quarter  of  the  Year  1807. 

The  balance  in  the  Treasury,  which,  on  the  30th  day  of  September,  1806, 
amounted  to  $  5,496,969  77  cents,  did,  on  the  30th  day  of  September,  1807, 
amount  to  -  -  -  -  -  8,530,000 

The  receipts  into  the  Treasury  from  the  1st  °of  October,  to 
the  31st  of  December,  1807,  are  estimated  at  -  4,000,000 


$  12,530,000 


•  The  expenses  during  the  same  period,  for  all  objects  whatever,  the  public 
debt  excepted,  and  including  686,076  dollars  for  the  extraordinary  expendi- 
tures of  the  Navy  Department,  of  which  the  estimate  has  been  transmitted, 
are  estimated  at     -  -  -  -  -  t  1,700,000 

The  ordinary  payments  on  account  of  the  public  debt,  in- 
cluding the  provision  for  the  interest  on  the  Louisiana  and 
Dutch  debt,  to  the  1st  July,  1808,  are  estimated  at  -  1,700,000 

A  farther  sum  of  about  1,500,000  dollars,  should  also  be 
paid  during  this  quarter,  in  order  to  complete  the  annual  ap- 
propriation of  8,000,000  of  dollars.  If  the  whole  of  this  sum 
which  is  applicable  to  the  purchase  of  the  eight  per  cent,  stock 
eannot  be  expended  this  year,  the  unexpended  balance  will 
form  an  additional  expenditure  for  the  year  180S;  charging, 
however,  the  whole  to  this  quarter,  -  1,500,000 


Makes  an  aggregate  of  jg  4, 900,000 

And  will  leave  in  the  Treasury  at   the  close  of  the  year,  a 
balance  of  about  seven  millions,  six  hundred  thousand  dollars.         7,630,000 


8  12,530,000 


Expenditures  of  the  Year  1808. 

The  permanent  expenses,  calculated  on  a  peace  establishment,  are  estima- 
ted at  11,600,000  dollars,  and  consist  of  the  following  items,  viz: 

1st.  For  the  Civil  Department,  and  all  domestic  expenses 
of  a  civil  nature,  including  invalid  pensions,  the  light-house 
and  mint  establishments,  the  expenses  of  surveying  public 
lands  and  the  sea  coast,  the  fifth  instalment  of  the  loan  due  to 
Maryland,  and  a  sum  of  100,000  dollars,  to  meet  such  miscel- 
laneous appropriations  not  included  in  the  estimates,  as  may  be 
made  by  Congress,    --*-..-  1,100,000. 


358  REPORTS  OF  THE  [1807. 

2d.  For  expenses  incident  to  the  intercourse  with  foreign 
nations,  including  the  permanent  appropriation  for  Algiers,  $  200,000 

3d.  For  the  Military  and  Indian  Department,  including 
trading  houses,  and  the  permanent  appropriations  for  certain 
Indian  tribes,  -  -  -  -  -  -         1,280,000 

4th.   For  the  Naval  establishment,  -  -  -         1,020,000 

5th.  The  annual  appropriation  of  eight  millions  of  dollars, 
for  the  payment  of  the  principal  and  interest  of  the  Public 
Debt,  of  which  sum  not  more  than  3,400,000  dollars  will 
for  the  year   1808,   be  applicable  to  the  payment  of  interest,         8,000,000 

S  11,600,000 
To  the  permanent  expenses  must  be  added  for  the  year  1808, 
a  sum  of  about  800,000  dollars,  necessary,  in  addition  to  the 
annual  appropriation  of  eight  millions  of  dollars,  to  complete, 
on  the  1st  January,  1809,  the  reimbursement  of  the  eight  per 
cent  stock,  ._..__  800,000 

And  for  paying  the  balance  of  American  claims  assumed 
by  the  French  convention,  -  200,000 


Making  altogether,  for  the  expenses  of  that  year  $  12,600,000 

The  receipts  of  that  year  having  been   estimat- 
ed at  -  -  -  .  -  15,S00,O0O 

And  the  probable  balance  in  the  Treasury  on  the 
1st  January  next,  at  -  7,630,000 

Making  altogether,  -  -  -       $23,430,000 

Would  therefore,  probably,  leave  in  the  Treasury  on  the  1st 
January,  1809,  a  balance  of  near  eleven  millions  of  dollars.  10,830,000 

$23^430,000 


Public  Debt. 

It  appears  by  the  statement  (D.)  that  the  payments  on  account  of  the  prin- 
cipal of  the  public  debt  have,  during  the  year  ending  on  the  30th  day  of  Sep- 
tember, 1807,  exceeded  four  millions  six  hundred  thousand  dollars;  making 
the  total  of  public  debt  reimbursed  from  the  1st  of  April,  1801,  to  the  1st 
of  October,  1807,  about  twenty-five  millions  eight  hundred  and  eighty 
thousand  dollars,  exclusively  of  more  than  six  millions  which  have  been 
paid  during  the  same  period  in  conformity  with  the  provisions  of  the  treaty 
and  convention  with  Great  Britain,  and  of  the  Louisiana  convention. 

Of  the  twelve  millions  of  dollars,  which,  according  to  the  preceding  esti- 
mates, may  be  paid  on  account  of  the  public  debt  between  the  30th  Septem- 
ber, 1807,  and  the  1st  January,  1809,  about  eight  millions  will  be  on  account, 
of  the  principal.  It  must,  however,  be  observed,  that  the  unascertained  re-" 
suit  of  the  proposition  made  to  the  public  creditors  for  a  modification  of  the 
debt,  may  affect  the  amount  payable  during  the  3fear  180S,on  account  of 
both  principal  and  interest. 


1807.]  SECRETARY  OF  THE  TREASURY.  35$ 

On  the  first  day  of  January,  1809,  the  principal  of  the  debt  will,  if  the 
proposed  modification  be  not  assented  to  by  the  public  creditors,  amount  to 
near  fifty-seven  millions  and  five  hundred  thousand  dollars  :  the  subsequent 
annual  payments  thereon,  on  account  of  principal  and  interest,  will  not,  ex- 
clusively of  occasional  purchases,  exceed  4,600,000  dollars;  and  the  whole 
of  the  debt,  the  nineteen  millions  three  per  cent,  stock  only  excepted,  will 
be  reimbursed  in  sixteen  years. 

A  general  subscription  would  reduce  the  capital  to  about  fifty -one  millions 
of  dollars;  the  payments  would  amount  to  eight  millions  of  dollars  annually, 
during  six  years,  and  average  less  than  three  millions  during  the  seven  fol- 
lowing; at  the  end  of  which   period  the  whole  debt  would  be  extinguished. 

An  annual  unappropriated  surplus  of  at  least  three  millions  of  dollars  may 
henceforth  be  relied  upon  with  great  confidence.  The  receipts  of  the  year 
1808  have  been  estimated  at  15,800,000,  and  the  expenses  at  12,600,000 
dollars.  The  permanent  revenue  has  been  computed  at  14,500,000  dollars; 
and  the  permanent  expenses  predicated  on  an  annual  payment  of  eight  mil- 
lions of  dollars  on  account  of  the  debt,  have  been  stated  at  11,600,000  dol- 
lars. And  as  these  would,  if  no  modification  of  the  debt  shall  take  place, 
be  reduced  to  less  than  8,500,000,  the  annual  surplus  would  then  amount  to 
six  millions  of  dollars.  Nor  are  the  seven  millions  and  a.  half  of  dollars 
which  will  remain  in  the  Treasury  at  the  end  of  the  present  year,  included 
in  the  calculation. 

What  portion  of  that  surplus  may  be  wanted  for  necessary  measures  of 
security  and  defence;  what  portion  should  be  applied  to  internal  improve- 
ments, which,  while  increasing  and  diffusing  the  national  wealth,  will 
strengthen  the  bonds  of  union;  are  subjects  which  do  not  fall  within  the 
province  of  the  Treasury  Department.  But  it  is  not  improbable  that,  after 
making  ample  provision  for  both  those  objects,  considerable  surplusses,  and 
which  can  no  longer  be  applied  to  the  redemption  of  the  debt,  may  still 
accumulate  in  the  Treasury. 

A  previous  accumulation  of  treasure  in  time  of  peace,  might,  in  a  great 
degree,  defray  the  extraordinary  expenses  of  war,  and  diminish  the  ne- 
cessity of  either  loans  or  additional  taxes.  It  would  provide,  during  periods 
of  prosperity ,  for  those  adverse  events  to  which  every  nation  is  exposed, 
instead  of  increasing  the  burthens  of  the  people  at  a  time  when  they  are 
least  able  to  bear  them,  or  of  impairing  by  anticipations  the  resources  of 
ensuing  generations.  And  the  public  moneys  of  the  United  States  not 
being  locked  up  and  withdrawn  from  the  general  circulation,  but,  on  the 
contrary,  deposited  in  banks,  and  continuing  to  form  a  part  of  the  circu- 
lating medium;  the  most  formidable  objection  to  that  system,  which  has 
nevertheless  been  at  times  adopted  with  considerable  success  in  other  coun- 
tries, is  thereby  altogether  removed.  It  is  also  believed  that  the  renewal  of 
the  charter  of  the  Bank  of  the  United  States,  may,  amongst  other  advan- 
tages, afford  to  government  an  opportunity  of  obtaining  interest  on  the  pub- 
lic deposites  whenever  they  shall  exceed  a  certain  amount.  Should  the 
United  States,  contrary  to  their  expectation  and  desire,  be  involved  in  a  war, 
it  is  believed  that  the  receipts  of  the  year  1808  will  not  be  materially  affect- 
ed by  the  event,  inasmuch  as  they  will  .principally  arise  from  the  revenue 
accrued  during  the  present  year.  The  amount  of  outstanding  bonds  due  by 
importers,  after  deducting  the  debentures  issued  on  account  of  re-exporta- 
tions, exceeds  at  this  time  sixteen  millions  of  dollars.  The" deductions  to 
be  ,made  from  these  on  account  of  subsequent  re-exportations,  would,  in  case 


360  REPORTS  OF  THE  £1807# 

of  war,  be  less  than  usual;  for  exportations  will  then  be  checked  as  well 
as  importations;  and,  in  proportion  as  these  will  decrease,  a  greater  home 
demand  will  be  created  for  the  stock  on  hand,  and- the  necessity  of  re-ex- 
porting be  diminished. 

It  has  already  been  stated  that  the  specie  in  the  Treasury  at  the  end  of 
this  year,  together  with  the  surplus  of  the  year  1808,  will  amount  to  near 
eleven  millions  of  dollars:  a  sum  probably  adequate  to  meet  the  extraordi- 
nary expenses  of  a  war  for  that  year.  It  will  also  be  recollected,  that,  in 
the  estimated  expenses  of  the  year  1808,  a  reimbursement  of  near  five  mil- 
lions and  a  half  of  the  principal  of  the  debt  is  included.  The  only  provision, 
therefore,  which  may,  under  any  contingency,  be  necessary  for  the  extraor- 
dinary service  of  that  year,  in  order  to  cover  any  deficiency  of  revenue  or 
increase  of  expenditure  beyond  what  has  been  estimated,  will  be  an  au- 
thority to  borrow  a  sum  equal  to  that  reimbursement. 

That  the  revenue  of  the  United  States  will,  in  subsequent  years,  be  con- 
siderably impaired  by  a  war,  neither  can,  or  ought  to  be  concealed.  It  is, 
on  the  contrary,  necessary,  in  order  to  be  prepared  for  the  crisis,  to  take  an 
early  view  of  the  subject,  and  to  examine  the  resources  which  should  be 
selected  for  supplying  the  deficiency  and  defraying  the  extraordinary  ex- 
penses. 

There  are  no  data  from  which  the  extent  of  the  defalcation  can  at  this  mo- 
ment be  calculated,  or  even  estimated.  It  will  be  sufficient  to  state,  1st. 
That  it  appears  necessary  to  provide  a  revenue  at  least  equal  to  the  annual 
expenses  on  a  peace  establishment,  the  interest  of  the  existing  debt,  and  the 
interest  on  the  loans  which  may  be  raised.  2dly.  That  those  expenses,  to- 
gether with  the  interest  of  the  debt,  will,  after  the  year  1808,  amount  to  a 
sum  less  than  seven  millions  of  dollars;  and,  therefore,  that  if  the  present 
revenue  of  14,500,000  dollars  shall  not  be  diminished  more  than  one  half 
by  a  war,  it  will  still  be  adequate  to  that  object,  leaving  only  the  interest  of 
war-loans,  to  be  provided  for. 

'  Whether  taxes  should  be  raised  to  a  greater  amount,  or  loans  be  altogether 
relied  on  for  defraying  the  expenses  of  the  war,  is  the  next  subject  of  con- 
sideration. 

Taxes  are  paid  by  the  great  mass  of  the  citizens,  and  immediately  affect 
almost  every  individual  of  the  community:  Loans  are  supplied  by  capitals 
previously  accumulated  by  a  few  individuals.  In  a  country  where  the  re- 
sources of  individuals  are  not  generally  and  materially  affected  by  the  war, 
it  is  practicable  and  wise  to  raise  by  taxes  the  greater  part  at  least  of  the  an- 
nual supplies.  The  credit  of  a  nation  may  also,  from  various  circumstances, 
be  at  times  so  far  impaired  as  to  leave  no  resource  but  taxation.  In  both 
respects  the  situation  of  the  United  States  is  totally  dissimilar. 

A  maritime  war  will,  in  the  United  States,  generally  and  deeply  affect, 
whilst  it  continues,  the  resources  of  individuals;  as  not  only  commercial 
profits  will  be  curtailed,  but  principally  because  a  great  portion  of  the  sur- 
plus of  agricultural  produce  necessarily  requires  a  foreign  market.  The 
reduced  price  of  the  principal  articles  exported  from  the  United  States,  will 
operate  more  heavily  than  any  contemplated  tax.  And  without  inquiring 
whether  a  similar  cause  may  not  still  more  deeply  and  permanently  affect  a 
nation  at  war  with  the  United  States,  it  seems  to  follow,  that  so  far  as  relates 
to  America,  the  losses  and  privations  caused  by  the  war  should  not  be  ag- 
gravated by  taxes  beyond  what  is  strictly  necessary.  An  addition  to  the 
debt  is  doubtless  an  evil;  but  experience  having  now  shown  with  what  rapid 


1807.]  SECRETARY  OF  THE  TREASURY.  361 

progress  the  revenue  of  the  Union  increases  in  time  of  peace;  with  what 
facility  the  debt  formerly  contracted,  has  in  a  few  years  been  reduced;  a 
hope  may  confidently  be  entertained,  that  all  the  evils  of  the  war  will  be 
temporary  and  easily  repaired:  and  that  the  return  of  peace  will,  without  any 
effort,  afford  ample  resources  for  reimbursing  whatever  may  have  been  bor- 
rowed during  the  war. 

The  credit  of  the  United  States  is  also  unimpaired,  either  at  home  or 
abroad;  and  it  is  believed  that  loans  to  a  reasonable  amount  may  be  obtained 
on  eligible  terms.  Measures  have  been  taken  to  ascertain  to  what  extent 
this  may  be  effected  abroad.  And  it  will  be  sufficient  here  to  suggest,  that 
the  several  banks  of  the  United  States  may  find  it  convenient,  after  the  en- 
suing year,  and  as  the  diminished  commerce  of  the  country  may  require 
less  capital,  to  loan  to  government  a  considerable  portion  of  their  capital 
stock,  now  computed  at  about  forty  millions  of  dollars. 

It  might  be  premature  to  enter  into  a  particular  detail  of  the  several 
branches  of  revenue  which  may  be  selected  in  order  to  provide  for  the  in- 
terest of  war-loans,  and  to  cover  deficiencies  in  case  the  existing  revenue 
should  fall  below  seven  millions  of  dollars.  A  general  enumeration  seems 
at  present  sufficient.. 

1.  Not  only  the  duty  on  salt  and  the  Mediterranean  duties  may  be  imme- 
diately revived,  but  the  duties  on  importation  generally,  may,  in  case  of 
war,  be  considerably  increased,  perhaps  doubled,  with  less  inconvenience 
than  would  arise  from  any  other  mode  of  taxation.  Without  resorting  to 
the  example  of  other  nations,  experience  has  proven  that  this  source  of  re^ 
venue  is,  in  the  United  States,  the  most  productive,  the  easiest  to  collect, 
and  the  least  burthensome  to  the  great  mass  of  the  people.  In  time  of  war 
the  danger  of  smuggling  is  diminished;  the  scarcity  of  foreign  articles  pre- 
vents the  duty  ever  falling  on  the  importer;  the  consumers  are  precisely 
those  members  of  the  community  who  are  best  able  to  pay  the  duty;  and 
the  increase  of  domestic  manufactures  which  may  be  indirectly  affected,  is 
in  itself  a  desirable  object. 

2.  Indirect  taxes,  however  ineligible,  will  doubtless  be  cheerfully  paid 
as  war  taxes,  if  necessary.  Several  modifications  of  the  system  formerly 
adopted,  might,  however,  be  introduced,  both  in  order  to  diminish  some  of 
the  inconveniences  which  were  experienced,  and  particularly  to  ensure  the 
collection  of  the  duties. 

3.  Direct  taxes  are  liable  to  a  particular  objection,  arising  from  the  una- 
voidable inequality  produced  by  the  general  rule  of  the  Constitution  What- 
ever difference  may  exist  between  the  relative  wealth  and  consequent  ability 
of  paying  of  the  several  States,  still  the  tax  must  necessarily  be  raised  in 
proportion  to  their  relative  population.  Should  it,  however,  become  neces^- 
sary  to  resort  to  that  resource,  it  is  believed  that  a  tax  raised  upon  that  spe- 
cies of  property  in  each  State  which  by  the  State  laws  is  liable  to  taxation, 
as  had  originally  been  contemplated  by  Congress,  would  be  preferable  to  a 
general  assessment,  laid  uniformly  on  the  same  species  of  property  in  all  the 
States,  as  was  ultimately  adopted. 

All  which  is  respectfully  submitted. 

ALBERT  GALLATIN, 

Secretary  of  the  Treasury, 
Treasury  Department,  November  5th,  1807. 


362 


REPORTS  OP  THE 


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1807.] 


SECRETARY  OF  THE  TREASURY. 


363 


B. 

A  STATEMENT  exhibiting  the  Value  and  Quantities,  respectively ,  of 
Merchandise  on  which  duties  actually  accrued,  during  the  year  1806, 
(consisting  of  the  difference  between  articles  paying  duty,  imported, 
and  those  entitled  to  drawback,  re-exported,)  and,  also,  of  the  nett  re- 
venue which  accrued,  during  that  year,  from  duties  on  Merchandise, 
Tonnage,  Passports,  and  Clearances. 


GOODS  PATI3JG   DUTIES  AD  VALOREM. 

35,844,748  dollars,  at  12J  per  cent. 

4,480,593  50 

8,372,528       do            15         do                    -             - 

1  255,879  20 

570,203       do            20         do                    -             - 

114,040  60 

Additional  duty  on  $44,782,413,  at  2|  per  ct. 

1,119,560  32A 

44,787,479 

6,970,073  62 

«     Spirits,       10,479,093  gallons,  at  29.3  cts.  average 

3,074,398  19 

b     Sugar,        73,318,649  lbs.          at   2.5          average 

1,843,199  84 

e     Salt,              3,184,099  bushels,  at  20 

636,819  80 

, 

d    Wines,         1,386,838  gallons,  at  37.6        average 

521,527  02 

e     Teas,            4,750,881  lbs.         at  20.3         average 

966,686  11 

Coffee,       17,345,188  lbs.         at    5 

867,259  40 

Molasses,     8,533,590  gallons,  at    5 

426,679  50 

f     All  other  articles              .... 

1,014,841  30 

' 

16,321,484  78 

Deduct  duties  refunded,  after  deducting  therefrom 

duties  collected  on  merchandise,  the  particulars  of 

which  could  not  be  ascertained,  and  difference  in 

calculation                            "..'"'■"•           " 

17,400  69 

16,304,084  09 
334,247  39 

3^  percent,  retained  on  drawbacks 

. 

Extra  duty  of  10  percent,  on  merchandise  imported 

in  foreign  vessels                 - 

196,301  05 

Nett  amount  of  duties  on  merchandise 

16,834,632  53 

Duties  on  tonnage     -             -             -             -             - 

166,798  31 

Light  money               -             -            - 

52,531  06 

219,329  37 
20,318  00 

Duties  on  passports  and  clearances   ... 

. 

Sundry  accounts  not   yet  received,    estimated  at 

96,000  00 

Gross  revenue,  as  per  statement  A    - 

17,170,279  90 

Deduct  expenses  of  collection            ... 

- 

612,622  13 

Nett  revenue 

- 

16,557,657  77 

47 


364 


REPORTS  OF  THE 

Explanatory  Statements  and  Notes. 


[1807. 


A  Additional  duty  of  2 -J  per  cent. 

. 

' 

1,119,560  32 

3j  per  cent,  retained  on  drawback 

- 

. 

- 

- 

6,277  51 

Extra  duty  of  10  per  cent,  on  merchanc 

ise  imported 

in  foreign 

vessels 

4,039  99 

1,129,877  82 

a     Spirits — 

Grain,                     1st  proof 

1,088,977 

gallons, 

at  28  cts. 

304,913  56 

2d    do 

15,253 

do 

29 

4,423  37 

3d    do 

12,346 

do 

31 

3,827  26 

4th   do 

126,469 

do 

34 

42,999  46 

5th    do 

1,746 

do 

40 

698  40 

Other  materials,     1st  &  2d  do 

1,684,998 

do 

25 

421,249  50 

3d  proof 

3,005,857 

do 

28 

841,639  96 

4th   do 

4,531,285 

do 

32 

1,450,011  20 

5th  do 

11,988 

do 

38 

4,555  44 

6th  do 

174 

do 

46 

80  04 

10,479,093 


3,074,398  19 


b    Sugar — 


Brown,  71,271,927  pounds,  at  2£  cents 

White,  clayed    2,046,722        do  3       do 

73,318,649 


Salt- 


Imported,  bushels  of  56  pounds  -  .  - 

Exported,       -  -  -  84,850 

Amount  of  bounties  and  allowances, 
$198,751  02,  reduced  into  bushels 
at  the  present  rates,  993,755 


Paying  duty,  bushels  of  56  pounds, 


4,262,704 


1,078,605 
3,184,099  at  20  cts 


d    Wines- 


Madeira,  1st  quality, 

do       2d     do 
Sherry  and  St,  Lucar, 
Lisbon  and  Oporto, 
Burgundy  and  Champaign, 
Teneriffe,  Fayal,  8c  Malaga, 
Other,  in  bottles, 
do   in  casks, 


289,431  gallons,   at  58  cents 


23,249 

do 

50 

312,122 

do 

40 

472,722 

do 

30 

6,345 

do 

45 

70,554 

do 

28 

32,511 

do 

35 

179,904 

do 

23 

1,386,838 


Teas— 

Bohea,       ... 

393,920  lbs.  at  12  cents 

Souchong, 

1,534,115      do      18 

Hyson, 

645,872      do      32 

Other  green, 

2,176,974      do      20 

Extra  duty  on  teas  imported  from 

other  places  than  India, 

- 

4,750,881 


1,781,798  18 
61,401  66 


1,843,199  84 


636,819  89 


167,869  98 

11,624  50 

124,848  80 

141,816  60 

2,855  25 

19,755  12 

11,378  85 

41  377  92 

521,527  02 


47,270  40 
276,140  70 
206,679  04 
435,394  80 

1,201  17 

966,686  11 


1807.] 


SECRETARY  OF  THE  TREASURY. 


365 


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SECRETARY  OF  THE  TREASURY. 


367 


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1S07.] 


SECRETARY  OF  THE  TREASURY. 


371 


D. 

AN  ESTIMATE  of  the  Principal  redeemed  of  the  Debt  of  the  United 
States,  from  the  1st  October,  1806,  to  the  30th  September,  1807,  inclu- 
sively; showing  the  redemption  of  the  Principal  of  the  said  Debt,  from 
the  1st  April,  1801,  to  the  30th  September,  1807. 


Ox  ACCOUNT  OF  THE  DOMESTIC  DEBT. 

The  amount  of  warrants  issued  on  the  Trea- 
surer of  the  United  States,  on  account 
of  the  interest  of  the  domestic  deb*,  of 
the  reimbursement  of  the  old  six  per 
cent,  and  deferred  stocks,  and  of  pur- 
chases of  the  eight  per  cent,  and  ex- 
changed six  per  cent,  stocks,  from  1st 
Oct.  1806,  to  the  30th  September,  1807, 
exclusive  of  $36,934  49,  repaid  into 
the  Treasury,  and  $  2,499  63,  com- 
missions to  Agents  purchasing  stock, 
was        -        -        -  $5,834,423  03 

Deduct  interest  which  ac- 
crued during  the  same 
period,  calculated  quar- 
ter yearly  $^923,196  87 

And  loss  on 
the  pur- 
chase of 
Stock  b    15,078  20 

$2,938,275  07 


Redemption 
from  1st  Oct. 


Redemption 
from  1st  April, 


1806,   to   the  1 1801,     to    30th 


30th  Septem- 
ber, 1807. 


Reimbursement  of  the  Navy  six  per  cent, 
stock  -  - 

of  the  five  and  half  per  cent. 


of  the  four  and  half  per  cent. 


Ditto, 
stock 

Ditto, 
stock 

Payments  made  in  certificates  of  the  debt  of 

the   United  States,  on  account  of  lands 

Payments  made  to  foreign  officers,  and  for 

certain  parts  of  the  domestic  debt 
Payments  on  account  of  domestic  loans 

On  account  of  the  Foreign  Debt, 

Funds  having  previously  been  provided  in 
Europe,  tbe  warrants  issued  on  the 
Treasurer  of  the  United  States  for  that 
object,  from  1st  Oct.  1806,  to  30lh  Sept. 
1807,  were  less  than  the  amount  of  in- 
terest arising:  the  difference,  therefore, 
forms  a  deduction. 

48 


Sept.  1806,  per 
the  Secretary's 
report  of  5th 
December,  1806 


Total  Princi- 
pal redeemed, 
from  1st  April 
1801,  to  30th 
September 
1807. 


a  $2, 896, 147  96 

1,847,500  00 

'    176,000  00 

5,211  20 

2,146  36 


4,927,005  52 


$6,479,745  84 


711,700  00 


262,018  16 

74,331  50 
3,440,000  00 

10,236,108  05 


$9,375,893  80 

711,700  .00 

1,847,500  00 

176,000  00 

267,229  36 

76,477  86 
3,440,000  00 

10,236,108  05 


21,203,903  55 


26,130,909  07 


372 


REPORTS  OF  THE 


[1807. 


STATEMENT   D.— Continued. 


The  interest  accruing1  from  1st  Oct.  1806, 
to  30th  September,  1807,  was,  on?  the 
Dutch  debt,  including'  commissions  and 
charges        -        -        -        $66,632  60 

On  the  Louisiana  stock,  in- 
cluding commissions  677,666  47 


Am't  of  warrants  exclusive  of 
$24,614  71  repaid  into  the 
Tivasury,  and  $1,992  65 
commissionsjto  Agents  pur- 
chasing bills  of  Exchange, 
•was    '  $486,058  13 

Add  gain  on  Ex- 
change        -        9,427  58 


$744,299  07 


495,485  71 


248,813  36 


$4,678,192  16  $21,203,903  55  $25,882,095  71 


248,813  36 


a  1 

2. 


On  account  of  annual  reimbursement        -        -        - 
Eight  per  cent,  and  exchanged  six  per  cent. stocks  purchased 
Moneys  in  the  hands  of  Agents  purchasing  stock       - 
Moneys  in  the  hands  of  the  Treasurer  of  the  United  States,  as 
Agent  to  the  Commissioners  of  the  Sinking  Fund  - 


b  The  amount  of  eight  per  cent,  purchased 
Exchanged  six  per  cent.  do 


$  746,000 
260,005 

1,006,005 


$1,504,466  61 

1,006,005  00 

193,860  80 

191, SI 5  55 

$2,896,147  96 

cost       767,231  25 
253,851  95 

1,021,083  20 
1,006,005  00 


loss        $  15,078  20 


Treasury  Department,  Register's  Office,  5th  November,  1807. 

JOSEPH  NOURSE,  Register. 


1808.]  SECRETARY  OF  THE  TREASURY.  373 

REPORT  ON  THE  FINANCES, 

DECEMBER,  1808. 


In  obedience  to  the  directions  of  the  act  supplementary  to  the  act,  entitled 
"An  act  to  establish  the  Treasury  Department,"  the  Secretary  of  the  Trea- 
sury respectfully  submits  the  following  report  and  estimates. 
The  nett  revenue  arising  from  duties  on  merchandise  and  ton- 
nage, which  accrued  during  the  year  1806,  amounted  to        $  16,615,430 
And  that  which  accrued  during  the  year  1807,  amounted,  as 

will  appear  by  the  statement  (A.)  to  -  16^059,924 

The  same  revenue,  after  deducting  that  portion  which  arose 
from  the  duty  on  salt,  and  from  the  additional  duties  constitu- 
ting the  Mediterranean  Fund,  amounted  during  the  year 
1806,  to     -  -  -  :  -  -  -      14,84S,784 

And  during  the  year  1807,  to  -  -  -  -      14,375,855 

But  it  is  ascertained  that  the  nett;  revenue  which  accrued  during  the  three 
first  quarters  of  the  year  1808,  did  not  exceed  eight  millions  of  dollars,  and 
is  daily  decreasing. 

The  statement  (B.)  exhibits  /in  detail  the  several  species  of  merchandise 
and  other  sources,  from  which  that  revenue  was  collected  during  the  year 
1807. 

It  appears  by  the  statement  (C.)  that  the  sales  of  the  public  lands  have, 
during  the  year  ending  the  30th  September,  1808,  amounted  to  about  200,000 
acres;  and  the  payments  by  purchasers  to  near  550,000  dollars.  The  proceeds 
of  sales  in  the  Mississippi  Territory,  being,  after  deducting  the  surveying 
and  other  incidental  expenses,  appropriated,  in  the  first  place,  to  the  payment 
of  a  sum  of  1,250,000  dollars,  to  tbe  State  of  Georgia,  are  distinctly  stated. 
It  appears  by  the  statement  (D. )  that  the  payments  on  account  of  the  prin- 
cipal of  the  public  debt,  have,  during  the  same  period,  amounted  to  only 
2,335,000  dollars.  But  the  payments  from  the  Treasury,  for  the  annual 
reimbursement  of  the  six  per  cent,  and  deferred  stocks,  and  for  the  final  re- 
imbursement of  the  8  per  cent,  stock,  will  (exclusively  of  a  sum  of  730,000 
dollars,  already  in  the  hands  of  the  Treasurer,  as  Agent  for  the  Commissioners 
of  the  Sinking  Fund,)  amount  during  the  last  quarter  of  this  year,  to  5,376,000 
dollars:  making  the  total  of  public  debt  reimbursed  from  the  1st  of  April, 
1801,  to  the  1st  January,  1809,  about  thirty-three  millions  six  hundred  thou- 
sand dollars,  exclusively  of  more  than  six  millions  paid  during  the  same  pe- 
riod, in  conformity  with  the  provisions  of  the  treaty  and  convention  with 
Great  Britain,  and  of  the  Louisiana  Convention. 

The  public  debt  will,  on  the  1st  day  of  January,  1809,  amount  to  56,647,663 
dollars,  consisting  of  the  following  items: 
Old  six  percent,  stock,  nominal  amount,  $ 20,706,603  22 

unredeemed        -  #11,919,877  57 

Deferred  stock,nominaI  amount,$l  1,7 17,476  92,  unredeemed    9,386,627  08 
New  six  per  cent,  stock,  exchanged  at  par  for  old  six  and 

deferred  __..__      5,993,343  50 

New  six  per  cent,  stock,  arising  from  conversion  of  three  per 

cent,  stock,  at.  65  new  six  for  100  three  per  cent,  stock,        1,859,770  70 


374  REPORTS  OF  THE  [1808. 

1796  six  per  cent,  stock,    -----  80,000  00 

Louisiana       do.  11,250,000  00 


Total  six  per  cent,  stock,     -  -  -  $40,489,618  85 

Three  per  cent,  stock,         -  -  -  "-  -     16,158,044,42 


$56,647,663  27 


The  interest  on  the  whole  debt,  and  the  annual  reimbursement  on  f  he  six 
per  cent,  and  deferred  stocks,  will,  for  the  ensuing  year,  amount  to  4,226,000 
dollars,  leaving,  in  order  to  complete  the  annual  appropriation  of  8,000,000 
dollars,  a  sum  of  3,774,000  dollars,  applicable  to  the  reimbursement  of  the 
new  exchange  six  per  cent,  stock.  The  whole  of  that  and  of  the  other  new 
six  per  centra  arising  from  the  conversion  of  three  per  cent,  stock,  amounting 
together  to  7,853,000  dollars,  would  thus  be  reimbursed  within  two  years. 
And  after  the  1st  day  of  January,  1811,  the  whole  annual  amount  payable  on 
account  of  interest  and  annual  reimbursement,  could  not.  during  the  seven  ensu- 
ing years,  exceed  3,756,000  dollars.  But,  under  existing  circumstances,  it  is 
believed  that  the  reimbursement  of  that  new  six  per  cent,  stock  will  be  nom- 
inal, and  must  be  effected  by  incurring  a  new  debt  to  an  equal  amount. 

The  actual  receipts  into  the  Treasury  during  the  year  ending  on  the  30th 
September,  1808,  as  they  principally  arose  irom  the  revenue  accrued  during 
the  preceding  year,  (and  the  payments  on  account  of  drawback  having  been 
diminished  by  the  embargo,)  have  been  greater  than  those  of  any  preceding 
year,  and  amounted  to       -  -$17,952,419   90 

And  the  specie  in   the  Treasury  on  the  1st  October,  1807, 

amounted  to  -  -  -  -  -      8,529,573  08 


Making  together   -----  $26,4S1,992  98 

The  disbursements  during  the  same  period  have  amounted  to  $12,635,275  46. 
Consisting  of  the  following  items: 

Civil  Department  and  miscellaneous  ex- 
penses -  -  -  -$1,258,967  18 

Foreign  intercourse,and  payment  of  Amer- 
ican claims,  assumed  by  the  Louisiana 
Convention  406,499  37 

Military  and  Indian  Departments,  includ- 
ing fortifications  and  the  expenses  of  the 
new  Army,      -  -  -  -      3,023,759  55 

Naval  Department,  including  the  appropri- 
ation of"  $677,064  47,  to  cover  the  de- 
ficit of  the  preceding  year,        -  -      2,257,064  47 

Public  Debt,  principal  and  interest,  (the 
greater  part  of  the  payments  for  the  year 
1808,  falling,  as  already  stated,  in  the 
last  quarter,)  have  amounted  only  to      -      5,688,984  89 


12,635,275  46 
Leaving  a  balance  in  the  Treasury,  on  the  30th  September, 

1808,  of  -  -     13,846,717  52 

$26,4S  1,992   98 


1 80S.]       SECRETARY  OF  THE  TREASURE         37$ 

The  cash  in  the  hands  of  Collectors  and  Receivers,   and  the  outstanding 
revenue  bonds,  which  will  almost  altogether  fall  due  prior  to  the  1st  of  Janu- 
ary, 1810,  may,  after  deducting  the  debentures  yet  unpaid,  and  the  expenses 
of  collection,  be  estimated  to  have  amounted,  on  the  30th  September,  1808, 
to      -  -  -  -----  -  $10,500,000 

Making,  together  with  the  balance  in  the  Treasury  on  that 

day,  of      ------  -      13,846,000 


An  aggregate  of         -  -$24,346,000 

Although  the  expenses  of  the  present  quarter  cannot  at  present 
be  precisely  ascertained,  they  wTill  not,  including  the  reim- 
bursement of  5,376,000  dollars,  on  account  of  the  principal 
of  the  public  debt,  exceed  -  8,346,000 

Leaving  on  the  1st  day  of  January,  1S09,  a  sum  of  -  -   $  16,000,000 

Sixteen  millions  of  dollars  in  cash  or  bonds,  payable  during  the  year  1809, 
and  applicable  to  the  expenses  of  that  year.  It  is  presumed  that  the  receipts 
arising  from  importations  and  payments  for  lands,  subsequent  to  the  30th 
September,  1808,  will  not  be  greater  than  the  deductions  on  account  of  bad 
debts,  and  of  the  extension  of  credit  on  certain  articles. 

The  expenses  of  the  year  1809,  would,  according  to  the  appropriations 
already  made,  and  to  the  usual  annual  estimates,  amount  to  thirteen  millions 
of  dollars,  consisting  of  the  following  items: 

1.  Civil  list  and  miscellaneous  expenses,    -  $900,000 

2.  Foreign  intercourse,      -----  200,000 

3.  Grants  by  Congress,  and  other  miscellaneous  unforeseen 

demands,      ___---_  150,000 

4.  Military  and  Indian  Departments,         -/'-.-  2,736,000 

5.  Naval  Department,       -----  1,014,000 

6.  Annual  appropriation  for  the  Public  Debt,         -             -  8,000,000 


$13,000,000 


Leaving  a  surplus  of  only  three  millions  of  dollars  for  defraying  all  the 
expenses  for  fortifications,  military  stores,  increase  of  the  Army  and  Navy, 
or  otherwise  incident  to  a  state  of  actual  war,  or  of  preparations  for  war. 

The  annual  appropriation  on  account  of  the  public  debt,  amounting  to 
eight  millions,  and  the  interest  for  the  year  1809,  being  less  than  three  mil- 
lions of  dollars;  an  authority  to  borrow  five  millions,  would  only  create  a 
new  debt  equal  to  the  principal  of  old  debt  reimbursed  during  that  year,  and 
appears  sufficient  to  provide  for  any  deficiency  arising  from  the  extraordina- 
ry expenses  which  may  be  thus  authorized  by  Congress. 

It  thus  appears,  that,  notwithstanding  the  general  warfare  of  the  belligerent 
powers  against  neutral  nations,  and  the  consequent  suspension  of  commerce 
which  took  place  in  the  latter  end  of  the  year  1807,  and  notwithstanding  the 
increased  rate  of  expenditure  naturally  arising  from  that  state  of  things;  the 
ordinary  revenue  will  have  been  sufficient  to  defray  ail  the  expenses  of  the 
years  1808  and  1S09,  including  for  1808,  a  reimbursement  of  debt  exceeding 
six  millions  of  dollars,  and  without  making  any  addition  to  that  debt  in  1809. 
The  measures  necessary  to  be  adopted  in  order  to  make  a  timely  provision. 


376  REPORTS  OF  THE  [1808. 

for  the  service  of  the  ensuing  years,  depend  on  the  course  which  the  United 
States  will  pursue  in  relation  to  foreign  aggressions.  And  that  being  yet  un- 
ascertained, it  becomes  necessary  to  examine  the  several  alternatives  left  to 
the  choice  of  Congress. 

Either  the  navigation  of  the  ocean  will  be  abandoned  by  the  United  States, 
or  it  will  be  resumed. 

The  first  supposition  is  that  of  a  continuance  of  the  embargo  of  the  vessels 
of  the  United  States,  and  admits  of  two  alternatives. 

1  Either  a  provision  generally  forbidding  exportations,  may  continue  to 
make  part  of  the  system,  in  which  case,  importations,  whether  expressly  in- 
terdicted or  not,  must,  for  want  of  the  means  of  payment,  be  also  discon- 
tinued. 

2.  Our  exportations  and  corresponding  importations  may  be  permitted  in 
foreign  vesselsT 

The  second  supposition  also  offers  two,  and  only  two  alternatives.  It  may 
indeed  be  admitted,  that  the  decrees  of  France  can  be  enforced  only  in  her 
own  territories,  and  in  those  of  her  allies;  that  however  efficient  in  prevent- 
ing any  commerce  between  the  United  States  and  herself,  those  decrees  can- 
not materially  affect  that  between  her  enemies  and  the  United  States;  and 
may,  therefore,  in  that  respect,  be  disregarded.  But  Great  Britain  having 
the  means  of  enforcing  her  orders  on  the  ocean,  the  navigation  of  that  ele- 
ment cannot  be  resumed  without  encountering  those  orders;  and  they  must 
either  be  submitted  to  or  resisted.  There  can  be  no  middle  way  between 
the  two  courses. 

3.  Either  America  must  accept  the  portion  of  commerce  allotted  to  her  by 
the  British  edicts,  and  abandon  all  that  is  forbidden — and  it  is  not  material 
whether  this  be  done  by  legal  provisions,  limiting  the  commerce  of  the 
United  States  to  the  permitted  places — or  by  acquiescing  in  the  capture  of 
vessels  stepping  beyond  the  prescribed  bounds. 

4.  Or  the  nation  must  oppose  force  to  the  execution  of  the  orders  of  Eng- 
land; and  this,  however  done,  and  by  whatever  name  called,  will  be  war. 

Of  those  four  alternatives,  the  second  and  third  differ  neither  in  principle 
nor  in  their  effect  on  the  revenue.  As  both  plans  consist  in  permitting  par- 
tial exportations  and  importations,  it  must  be  acknowledged,  that  objection- 
able as  that  course  may  be  in  other  respects,  if  considered  merely  in  relation 
to  the  fiscal  concerns  of  the  Union,  it  will,  for  the  moment,  be  attended  with 
less  difficulties  than  either  the  present  system  or  war.  For,  however  narrow 
the  limits  to  which,  on  that  plan,  the  exportations  and  importations  of  the 
United  States  may  be  reduced,  yet  there  will  still  be  some  commerce,  and 
some  revenue  arising  from  commerce.  And,  as  in  pursuing  that  humble 
path,  means  of  defence  will  become  unnecessary,  as  there  will  be  no  occasion 
for  either  an  army  or  a  navy,  it  is  believed  that  there  would  be  no  difficul- 
ty in  reducing  the  public  expenditure  to  a  rate  corresponding  with  the  frag- 
ments of  impost  which  might  still  be  collected.  If  that  course  be  adopted,  no 
other  provision  seems  necessary  than  an  immediate  reduction  of  expenses. 

The  system  now  in  force,  and  war,  however  dissimilar  in  some  respects,  are 
both  considered  as  resistance.  Nor  is  it  believed  that  their  effect  on  nation- 
al wealth  and  public  revenue  would  be  materially  different.  In  either  case, 
a  portion,  and  a  portion  only,  of  the  national  industry  and  capital  heretofore 
employed  in  the  production,  transportation,  and  exchange  of  agricultural  pro- 
ducts, or  in  the  foreign  carrying  trade,  can  immediately  be  diverted  to  other 


1808.]  SECRETARY  OF  THE  TREASURY.  377 

objects.  In  case  of  a  continuance  of  the  embargo  and  non-exportation,  either 
a  less  quantity  of  commodities  must  be  produced,  or  a  portion  will  accumu- 
late until  the  freedom  of  commerce  shall  be  restored.  In  case  of  war,  that 
surplus  will  be  exported;  and  although  a  part  must  be  lost  by  capture,  a  por- 
tion of  the  returns  will  be  received.  If  the  embargo  and  suspension  of  com- 
merce shall  be  continued,  the  revenue  arising  from  commerce,  will,  in  a  short 
time,  entirely  disappear.  In  case  of  war,  some  part  of  that  revenue  will  re- 
main; but  it  will  be  absorbed  by  the  increase  of  public  expenditure.  In 
either  case,  new  resources,  to  an  amount  yet  unascertained,  must  be  resorted 
to.  But  the  assertion  that  that  amount  will  be  nearly  the  same,  in  either  of 
the  two  alternatives  of  embargo  or  war,  is  correct  only  on  the  supposition  that 
the  embargo  and  non-exportation  are,  after  a  certain  time,  to  be  superseded 
by  war,  unless  foreign  aggression  shall  cease;  and  that,  rendering  therefore 
preparations  for  war  necessary,  they  require  a  rate  of  expenditure  far  beyond 
that  of  a  peace  establishment. 

If,  however,  the  embargo  and  non-intercourse  are  to  have  equal  continuance 
with  the  belligerent  edicts,  indefinite  as  that  is;  if  it  be  determined  to  rely  ex- 
clusively on  that  measure,  and  at  all  events  not  to  risk  a  war  on  account  of 
those  aggressions;  preparations  for  war  will  become  useless,  and  the  extraor- 
dinary expenses  need  not  be  incurred.  In  that  case,  the  expenditure  for  the 
year  1809,ought  not  to  exceed  the  sum  of  thirteen  millions  of  dollars,  which, 
as  has  been  stated,  is  requisite  for  the  support  of  the  present  establishment. 
And  this  would  leave  for  the  service  of  the  year  1810,  the  above-mentioned 
surplus  of  three  millions,  and  the  proposed  loan  of  five  millions,  which,  to- 
gether, would  be  sufficient  to  defray  the  peace  establishment,  and  to  pay  the 
interest  on  the  public  debt  during  that  year.  Thus  two  years  more  would 
be  provided  for,  without  either  increasing  the  public  debt  or  laying  any  new 
taxes.  It  is  certainly  only  with  a  view  to  war,  either  immediate  or  contem- 
plated, that  it  will  become  necessary  to  resort,  at  least  to  any  considerable 
extent,  to  extraordinary  sources  of  supply. 

Legitimate  resources  can  be  derived  only  from  loans  or  taxes:  and  the 
reasons  which  induce  a  belief  that  loans  should  be  principally  relied  on  in 
case  of  war,  were  stated  in  the  annual  report  of  last  year.  That  opin- 
ion has  been  corroborated  by  every  subsequent  view  which  has  been  taken 
of  the  subject,  as  well  as  by  the  present  situation  of  the  country.  The  em- 
bargo has  brought  into,  and  kept  in  the  United  States,  almost  all  the  float- 
ing property  of  the  nation.  And  whilst  the  depreciated  value  of  domestic 
products  increases  the  difficulty  of  raising  a  considerable  revenue  by  internal 
taxes,  at  no  former  time  has  there  been  so  much  specie,  so  much  redundant 
unemployed  capital  in  the  country.  The  high  price  of  public  stocks,  and  in- 
deed of  all  species  of  stocks,  the  reduction  of  the  public  debt,  the  unimpair- 
ed credit  of  the  general  government,  and  the  large  amount  of  existing  bank 
stock  in  the  United  States,  leave  no  doubt  of  the  practicability  of  obtaining 
the  necessary  loans  on  reasonable  terms. 

The  geographical  situation  of  the  United  States,  their  history  since  the  re- 
volution, and,  above  all,  present  events,  remove  every  apprehension  of  fre- 
quent wars.  It  may  therefore  be  confidently  expected,  that  a  revenue  derived 
solely  from  duties  on  importations,  though  necessarily  impaired  by  war,  will 
always  be  amply  sufficient,  duringlong  intervals  of  peace,  not  only  to  defray 
current  expenses,  but  also  to  reimburse  the  debt  contracted  during  the  few 
periods  of  war. 

No  internal  taxes,  either  direct  or  indirect,  are  therefore  contemplated, 
even  in  the  case  of  hostilities  carried  against  the  two  great  belligerent  powers. 


078  REPORTS  OF  THE  [1808. 

Exclusively  of  the  authority  which  must,  from  time  to  time,  be  given  to  bor- 
row the  sums  required,  (always  providing  for  the  reimbursement  of  such 
loans  within  limited  periods,)  and  of  a  due  economy  in  the  several  branches 
of  expenditure,-  nothing  more  appears  necessary  than  such  modifications,  and 
increase  of  the  duties  on  importations,  as  are  naturally  suggested  by  existing 
circumstances. 

1.  Although  importations  have  already  considerably  diminished,  and  may, 
under  the  system  now  in  force,  shortly  be  altogether  discontinued,  no  rea- 
sonable objection  is  perceived  against  an  increase  of  duties  on  such  as  may  still 
take  place.  Had  the  duties  been  doubled  on  the  1st  of  January,  1808,  as  was 
then  suggested  in  case  of  war,  the  receipts  into  the  Treasury  during  that  and 
the  ensuing  year,  would  have  been  increased  nine  or  ten  millions  of  dollars. 
Those  articles  of  most  universal  consumption,  on  which  an  increase  of  duty 
would  be  inconvenient,  are  generally  either  free  of  duty  or  abundant. 

It  is  therefore  proposed,  that  not  only  the  Mediterranean  duties,  which 
will  expire  on  the  1st  day  of  January  next,  should  be  continued,  but  that  all 
the  existing  duties  should  be  doubled  on  importations  subsequent  to  that  day. 

2.  The  present  system  of  drawbacks  also  appears  susceptible  of  modifica- 
tions. The  propriety  of  continuing  generally  that  provision  of  the  embargo 
laws,  which  allows  a  drawback  on  articles  exported  more  than  one  year  after 
they  have  been  imported,  is  doubtful.  A  modification  might  check  specula- 
tions and  monopolies  The  diminution  of  importations  has  afforded  sufficient 
profits  on  most  of  the  articles  which  had  been  imported:  and  a  provision 
which  would  have  a  tendency  to  bring  into  market,  and  to  lessen  the  price  of 
those  articles,  would  be  generally  beneficial. 

-  3.  The  causes  which  induced  the  adoption  of  a  partial  non-importation  act, 
have  ceased  to  exist.  The  object  then  in  view,  has  merged  into  a  far  more 
important  one.  The  selection  of  interdicted  articles  was  founded,on  the  possi- 
bility of  obtaining  them  in  other  countries  than  England,  and  does  not  agree 
with  existing  circumstances.  The  act  producing  now,  no  other  effect  than 
to  increase  the  temptations,  and  to  produce  habits  of  smuggling,  impairs  and 
injures  the  revenue.  A  general  non-intercourse  with  that  country  would 
supersede  that  partial  measure,  and  might  be  executed  with  greater  facility. 
And  it  is  believed  that,  under  every  event,  its  repeal  will  be  beneficialf  and 
that  a  permanent  increase  of  duties  on  articles  selected  with  the  view  to  those 
which  may  be  manufactured  in  the  United  States,  would  be  preferable. 

4.  It  is  believed  that  the  present  system  of  accountability  of  the  Military 
and  Naval  establishments,  may  be  rendered  more  prompt  and  direct,  and  is 
susceptible  of  improvements,  which,  without  embarrassing  the  public  service, 
will  have  a  tendency  more  effectually  to  check  any  abuses  by  subordinate 
agents.  Provisions  to  that  effect  are  rendered  more  necessary  by  the  proba- 
ble increase  of  expense  in  those  departments. 

All  which  is  respectfully  submitted. 

ALBERT  GALLATIN, 
Secretary  of  the  Treasury. 
Treasury  Department,  December  lOth,  1808. 


1808.] 


SECRETARY  OF  THE  TREASURY. 


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49 


380  REPORTS  OF  THE  £180S. 

B. 

A  STATEMENT  exhibiting  the  value  and  quantities,  respectively,  of 
Merchandise,  on  ivhich  duties  actually  accrued  "during  the  year  1807, 
{consisting  of  the  difference  between  articles  paying  duty,  imported, 
and  those  entitled  to  drawback,  re-exported,)  and,  also,  the  nett  re- 
venue which  accrued,  during  that  year,  from  duties  on  Merchandise, 
Tonnage,  Passports,  and  Clearances. 

Goods  paying  duties  ad  valorem. 

$36,261,874             at      12§  per  cent.        -             -  $4,532,734  25 

9,484,6S2              at       15          do              -              -  1,422,702  30 

526,112  -           at      20          do              -  105,222  40 
a                            Additional  duty  on  $46,272,668  at  2i 

percent.           -  1,156,816  70 


46,272,668 


7,217,475  65 


b  Spirits,  9,031,018  gallons,  at  29.4  cents  average,     2,656,046  74 

c  Sugar,  65,801, S16  pounds,  at    2.6  do  do  1,694,432  20 

d  Salt,              3,542,672  bushels,  at  14.6  do  do  515,920  24 

e  Wines,         2,692,737  gallons,  at30.S  do  do  829,292  81 

/  Teas,             6,173,151  pounds,  at  19.4  do  do  1,197,966  86 

Coffee,  11,016,419  pounds,  at    5  cents  550,820  95 

Molasses,      8,255,753  gallons,  at    5  cents  412,787  65 

g  All  other  articles,             -             -  -  -  -  807,638  13 


Deduct  duties  refunded  after  deducting  there- 
from duties  collected  on  Merchandise,  the 
particulars  of  which  could  not  be  ascertained, 
and  difference  in  calculation,  29,072 


^15,882,381   23 


15,853,308  88 


Three  and  half  per  cent,  retained  on  drawbacks,  368,275  50 

Extra  duty  of  10  per  cent,  on  merchandise  im- 
ported in  foreign  vessels,         -  203,349  05 


Nett  amount  of  duties  on  merchandise,  $  16,424,933  43 

Duties  on  tonnage,  -  159,983  51 

Light  money,  -  46,347  55 


206,331  06 

Duties  on  passports  and  clearances,  -  -   ,  19,896  00 


$  16,651,160  49 
Sundry  accounts  not  yet  received,  estimated  at  1,000  00 

Gross  Revenue,  as  per  Statement  A,         -  16,652,160  49 

Deduct  expenses  of  collection,     -  +  -  607,750  96 

Nett  Revenue,     -  -  -  -  -   $  16,044,409  53 


1808.] 


SECRETARY  OF  THE  TREASURY. 

Explanatory  Statement  and  Notes. 


381 


«  Additional  duty  of  2£  per  cent.  

3^  per  cent,  retained  on  drawbacks,      ....... 

Extra  duty  of  10  per  cent,  on  merchandise  imported  in  foreign  vessels 


S  Spirits — from  grain,  1st    proof,        932,692  gallons,  at  28  cents, 


2d      do 

9,549 

do           29 

3d      do 

402 

do          31 

4th    do 

76,349 

do         34 

5th    do 

666 

do         40 

@ther  materials,  1st  &  2d     do 

1,115,435 

do         25 

3d     do 

3,017,756 

do         28 

4th    do 

3,862,708 

do         32 

5th    do 

15,437 

do         38 

6th    do 

55,924, 

24 

do         46 

9,031,018 

e   Sugar — Brown, 

457  pounds, 

at  1\  cents 

White, 

9,877, 

359      do 

3 

65,801,816 

i  Salt — Imported  bushels,  of  56  lbs. 

Exported,  88,259 

Amount  of  bounties  and  allow- 
ances,$188,634  90,reduced 
into  bushels,  at  5  bushels 
the  dollar,  943,175 


Payingduty,  bushels  of  56 lbs. 
Imported  bushels  of  56  lbs. 
Exported, 

Payingduty,  bushelsof  56  lbs. 


e  Wines — Madeira,  1st  quality, 
do       2d      do 
Sherry  and  St.  Lucar, 
Lisbon  and  Oporto,  &c. 
Burgundy  and  Champaign, 
TenerifFe,Fayal,  Malaga,  &c. 
Other,  in  bottles, 
do     in  casks, 


2,430,604 
22,927 


2,166,429 


1,031,434 

1,134,995  at  20  cents 


2,407,677  at  12  cents 


3,542,672 


221,630   gallons,  atB58  cents 

27,420  do  50 

309,633  do 

548,351  do 

10,958  do 

413,442  do 

90,703  do 

1,070,600  do 


40 
30 
4S 
28 
35 
23 


2,692,737 


/  Teas — Bohea, 

Souchong, 
Hyson, 

Other  green,     - 
Extra  duty  on  teas  import- 
ed from  other  places 
than  India, 


1,544,731  pounds,  at  12  cents 
1,380,429        do  18 

952,482        do  32 

2,295,509        do  20 


;  1,156,816  70 
9,201  95 
2,130  50 

1,168,149  15 


261,153  76 

2,769  21 

124  62 

25,958  66 

266  40 

278,858  75 

844,971  68 

1,236,066  56 

5,866  06 

11  04 

2,656,046  74 

1,398,111  43 
296,320  77 

1,694,432  20 


226,999  00 


288,921  24 
515,920  24 

128,545  40 
13,710  00 

123,853  20 

164,505  30 
4,931  10 

115,763  76 
31,746  05 

246,238  00 

829,292  81 

185,367  72 
248,477  22 
304,794  24 
459,101  80 


225  88 


6,173,151 


1,197,966  8S 


382. 


REPORTS  OF  THE 


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1809.]  SECRETARY  OF  THE  TREASURY.  39 j 

REPORT  ON  THE  FINANCES. 

JUNE,  1809. 


In  obedience  to  the  directions  of  the  act  supplementary  to  the  act,  entitled 
"  An  act  to  establish  the  Treasury  Department,"  the  Secretary  of  the  Trea- 
sury respectfully  submits  the  following  report: 

The  nett  revenue  arising  from  duties  on  merchandise  and  tonnage,  which 
accrued  during  the  year  1807,  amounted,  as  appeared  by  the  last  annual 
statement,  to  -  -  -  -  -  -     $16,060,000 

A  correct  statement  of  that  revenue  for  the  year  1808,  cannot  be  prepared 
at  this  time,  but  may  be  estimated,  as  will  appear  by  the  estimate  (A.)  to 
about  -----  -  -        10,270,000 

The  revenue  arising  from  the  same  sources,  which  accrued  during  the 
first  quarter  of  this  year,  did  not  much  exceed  one  million  of  dollars;  and 
although  considerable  importations  may  be  expected  from  Great  Britain  and 
the  West  Indies  during  the  last  six  months  <>f  this  year, yet,  considering  that 
there  will  be  no  arrivals  from  China  and  the  East  Indies,  and  the  situation  of 
the  commercial  intercourse  of  the  United  States  with  the  rest  of  the  world, 
it  is  not  probable  that  the  revenue  accruing  during  the  year  1809  will  exceed 
that  of  the  year  1808. 

The  specie  in   the  Treasury  on   the    1st   October,   1808, 

amounted  to       -----  -$13,846,717  52 

And  the  receipts  during  the  last  three  months  of  that  year, 

as  appears  by  the  statement  (B.)  to  -  -  ~      3,586,316  .99 


8  17,433,034  51 


The  disbursements,  during  the  same  period,  have  amounted,  including 
6,105,000  dollars  paid  in  reimbursement  of  the  principal  of  the  public  debt, 
to  -  -  -  _;_■•-  -  -      7,491,339  79 

Leaving  a  balance  in  the  Treasury,  on  the  1st  January, 

1809,  of  -  -  -■'  -  -  -      9,941,694  72 

$  17,433,034  51 


The  cash  in  the  hands  of  Collectors  and  Receivers,  and 
the  outstanding  revenue  bonds,  amounted,  on  the  1st  Jan- 
uary, 1809,  to    -  -  -  -  -  -  9,8S0,000 

From  which,  deducting  for  the  expenses  of  collection  and 

for  the  drawbacks  payable  during  the  year  1809  -  3,000,000 

Leaves,  for  the  probable  receipts  of  the  year  1809,  exclu- 
sively of  the  inconsiderable  sums  which  may  be  received 


392  REPORTS  OF  THE  [1809. 

on  account  of  the  revenue  accruing  during  that  year,  a 

sum  of-  -  -  -  -  -  -  6,880,000 

Making,  together  with  the  balance  in  the  Treasury  on  the 

1st  of  January,  1809,  of  -  -  -'  .-  -9,941,000 

An  aggregate  of  sixteen  millions  eight  hundred  and  twenty- 
one  thousand  dollars,  applicable  to  the  expenditures  of 
this  year.  .      $  16,821,000 


The  expenses  of  the  year  1809,  are,  in  conformity  with  the  existing  ap- 
propriations, estimated  at  fourteen  millions  five  hundred  thousand  dollars, 
consisting  of  the  following  items: 

Civil  list,  including  the  expenses  of  this  session  of  Congress,  miscellaneous 
expenses^and  foreign  intercourse  -  -  -  1,342,000 

Military  and  Indian  Departments,  viz: 
Appropriation  for  the  Army  and  Indian  De- 
partment     -  -  -"  -  -    2,765,000 
Appropriation  for  Fortifications             -             -       475,000 
Arms  and  Military  Stores         ...       550,000 


3,790,000 

Naval  Department,  this  year's  appropriation  -  -  2,915,000 

Public  debt,  (1,547,000  dollars  of  the  appropriation  of 
8,000,000  of  dollars  for  the  year  1809,  having  been  paid 
in  advance  in  the  year  1S08,  in  order  to  effect  the  reim- 
bursement of  the  whole  of  the  8  per  cent,  stock,)  -  6,453,000 


$14,500,000 


It  must,  however,  be  observed,  that  the  estimate  of  the  sums  payable  in 
the  course  of  this  year,  on  account  of  drawbacks,  is  conjectural,  and  that  the 
exporrations,  particularly  of  colonial  produce,  would,  if  the  restrictions  laid 
by  the  continental  powers  of  Europe  on  neutral  commerce  were  removed, 
produce  a  much  greater  defalcation  in  the  nett  receipts  into  the  Treasury, 
than  the  sum  assumed  in  the  preceding  estimate.  In  order  to  guard  against 
.any  inconvenience  arising  from  that  contingency,  and  for  the  purpose  of 
keeping  always  a  moderate  sum  in  the  Treasury,  it  may  be  necessary  to 
borrow  a  sum  equal  to  the  amount  of  the  principal  of  public  debt  which  will 
jjbe  reimbursed  during  the  year,  and  which  will  exceed  three  millions  of  dol- 
lars. 

By  the  10th  and  19th  sections  of  the  act  making  further  provision  for  the 
support  of  public  credit,  and  for  the  redemption  of  the  public  debt,  passed  on 
the  3d  of  March,  1795,  the  Commissioners  of  the  Sinking  Fund  are  author- 
ized, from  time  to  time,  to  borrow,  and  the  bank  of  the  United  States  to 
lend,  sums  equal  to  the  reimbursement  of  the  public  debt.  But  some  doubts 
having  arisen  whether  the  powers  vested  by  those  two  sections  are  applica- 
ble to  the  new  six  per  cent,  stocks,  issued  by  virtue  of  the  act  of  February 
11th,  1807,  in  exchange  of  the  old  six  per  cent,  deferred,  and  three  per 
cent,  stocks,  it  is  desirable  that  the  authority  should  be  expressly  extended, 
by  law,  to  that  case;  and  no  other  provision  seems  necessary  for  the  public 
service  of  this  year. 

It  would  be  premature  to  attempt,  at  this  time,  an  estimate  of  the  receipts 
and  expenditures  of  the  year  IS  10.    It  is  sufficient  to  observe,  that,  although 


2809,]  SECRETARY  OF  THE  TREASURY,  393 

the  receipts  may  exceed  those  of  the  present  year,  it  is  highly  improbable 
that  they  should  be  equal  to  the  expenditures  of  that  year,  which,  unless  the 
military  and  naval  establishments  should  be  reduced,  will  amount  to  sixteen 
millions  of  dollars.  But  it  is  believed  that  the  revenue  will,  after  that  year, 
be  adequate  to  discharge  the  annual  expenses. 

All  which  is  respectfully  submitted. 

ALBERT  GALLATIN: 

Treasury  Department,  June  1st,  1809. 


394 


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398  REPORTS  OF  THE  [1809. 

REPORT  ON  THE  FINANCES. 

DECEXIOEB,  1809. 


In  obedience  to  the  directions  of  the  act  supplementary  to  the  act,  entitled 
li  An  act  to  establish  the  Treasury  Department,"  the  Secretary  of  the  Trea- 
sury respectfully  submits  the  following  report  and  estimates: 

The  duties  on  merchandise  and  tonnage,  which  accrued  during  the  year 
1807,  amounted,  after  deducting  the  expenses  of  collection,  to  $  26,126,648 

From  which,  deducting  for  debentures  issued  on  account  of 
re-exportations,         _.,___       10,067,191 


Left  for  the  nett  revenue  accrued  during  that  year,  $  16,059,457 

The  same  duties  during  the  year  1808,  amounted,  after  de- 
ducting the  expenses  of  collection,  to  10,581,559 

From  which,  deducting  for  debentures  issued,  and  which 
on  account  of  the  embargo  did  not  exceed  -  249,396 


Leaves,  for  the  nett  revenue  accrued  during  that  year,  as 
will  appear  by  the  statement  (A.)  $  10,332,163 

The  statement  (B.)  exhibits  in  detail  the  several  species  of  merchandise, 
and  other  sources  from  which  that  revenue  was  collected  during  the  year 
1S08;  and  the  statement  (Afl.)  gives  a  comparative  view  of  the  importations 
and  re-exportations  of  the  several  species  of  merchandise  for  the  years  1807 
and  1808,  showing  thereby  distinctly  the  effect  of  foreign  aggressions  and 
commercial  restrictions  on  the  importations  of  foreign  articles. 

From  the  returns  already  received  for  the  three  first  quarters  of  the  pre- 
sent year,  and  from  the  general  knowledge  of  the  importations  made  during 
the  two  last  months,  it  is  believed  that  the  gross  amount  of  duties  on  mer- 
chandise imported  during  the  whole  year,  will,  after  deducting  the  expenses 
or  collection,  amount  to  about  ten  millions  of  dollars. 

But  as  the  debentures  issued  on  account  of  re-exportations,  (principally  of 
colonial  produce,)  will  amount  to  about  3,500,000  dollars,  the  nett  revenue 
accrued  during  the  year  1809,  cannot  be  estimated  at  more  than  six  millions 
and  a  half. 

It  appears  b}^  the  statement  (C. )  that  the  sales  of  public  lands  have,  dur- 
ing the  year  ending  on  the  30th  September,  1809,  amounted  to  143,000 
acres;  and  the  payments  by  purchasers  to  near  500,000  dollars.  The  pro- 
ceeds of  sales  in  the  Mississippi  Territory,  being,  after  deducting  the  sur- 
veying and  other  .incidental  expenses,  appropriated  in  the  first  place  to  the 
payment  of  a  sum  of  1,250,000  dollars  to  the  State  of  Georgia,  are  distinctly 
stated. 

It  appears  by  the  statement  (D. )  that  the  payments  on  account  of  the  prin- 
cipal of  the  public  debt,  have,  during  the  same  period,  amounted  to  near 


1809.]       SECRETARY  OF  THE  TREASURY.         399 

6,730,000  dollars;  the  reimbursement  of  the  eight  per  cent,  stock  having  taken 
place  on  the  first  of  January  last.  But  the  aggregate  of  payments  on  ac- 
count of  principal  and  interest,  will  not,  for  the  two  years  1808  and  1S09, 
exceed  the  sum  of  sixteen  millions  of  dollars  appropriated  by  law. 

The  same  statement  shows  that  about  34,796,000  dollars  of  the  principal 
of  the  debt  have  been  reimbursed  during  the  eight  years  and  a  half,  com- 
mencing on  the  1st  of  April,  1801,  and  ending  on  the  30th  September, 
1S09;  exclusively  of  more  than  six  millions  of  dollars  paid  in  conformity 
with  the  provisions  of  the  convention  with  Great  Britain  and  of  the  Louisiana 
convention. 

The  actual  receipts  into  the  Treasury,  during  the  year  ending  on  the  30th 
of  September,  1809,  have  amounted  to         -  -  -  $9,315,753  16 

Making,  together  with  the  balance  in  the  Treasury  on  the 
1st  October,  1808,  and  amounting  to  -  13,846,717  52 

An  aggregate  of  $23,162,470  68 

The  disbursements,  during  the  same  year,  have  consisted  of  the  following 

items,  viz: 

Civil  Department,   including  miscellaneous  expenses,  and  those  incident 

to  the  intercourse  with  foreign  nations,         -  -  -$1,439,633  23 

Military  and  Naval  establishments,   including  the  Indian 

Department,  viz: 

Military,  including  arms  and  fortifications  3,366,403  12 
Navy,  -----  2,379,267  80 
Indian  Department,         -  292,303  84 

6,037,974  76 

Interest  on  the  Public  Debt,         -  3,126,149  15 


10,603,757  14 
Reimbursement  of  principal  of  the  public  debt,  6,729,777  53 


Amounting  together,  as  will  appear  more  in  detail  by  the 
statement  (E.)  to    -  -  -  -  -  -  17,333,534  67 

And  leaving   in  the  Treasury,  on  the  30th  of  Septem- 
ber, 1809,  a  balance  of         -----     5,828,936  01 


$23,162,470   68 


Whence  it  appears  that  the  expenses  of  government,  exclusively  of  the 
payments  on  account  of  the  principal  of  the  debt,  have  exceeded  the  actual 
receipts  into  the  Treasury,  by  a  sum  of  near  thirteen  hundred  thousand  dol- 
lars; and  that  that  deficiency,  as  well  as  the  reimbursement  of  the  principal 
of  the  debt,  have  been  paid  out  of  the  sums  previously  in  the  Treasury,  or, 
in  other  words,  out  of  the  surplus  of  the  revenue  of  the  preceding  years. 

The  outstanding  revenue  bonds  may,  after  deducting  the  expenses  of  col- 
lection, and  allowing  for  bad  debts,  be  estimated  to  have  amounted,  on  the 
30th  of  September,  1809,  to  -  7,500,000 

The  duties  on  the  importations  during  the  last  quarter  will 
not,  probably,  after  making  a  similar  deduction,  fall  short  of  2,800,000 

All  those   will  fall  due  prior  to   the   1st   day  of  January, 
1811,  and  make,  together  with  the  balance  in  the  Treasury, 


400  REPORTS  OF  THE  [1809, 

on  the  30th  September,  1809,  and  amounting  as  above  stated, 

to  -  -  -  -  -  -  -  5,800,000 


An  aggregate  of  -•  -  -  -  -        $16,100,000 

The  expenses  of  the  present  quarter,  though  not  yet  precise- 
ly ascertained,  will  not,  probably,  including  the  payments  on 
account  of  the  public  debt,  exceed  -  3,600,000 


Leaving,  on  the  first  day  of  January,  1810,  a  sum  of  $  12,500,000 

About  twelve  and  a  half  millions  of  dollars  in  cash  or  bonds,  payable  dur- 
ing the  year  1810,  and  applicable  to  the  expenses  of  that  year.  This  esti- 
mate, however,  is  founded  on  the  supposition  that  the  amount  of  debentures 
payable  in  that  year,  will  not  exceed  two  millions  of  dollars,  and  that  the 
receipts  during  the  year,  arising  from  importations  subsequent  to  the  first  of 
January  next,  and  from  the  sales  of  lands,  will  be  sufficient  to  pay  those  de- 
bentures, and  to  leave  at  all  times  in  the  Treasury,  at  least  one  million  of 
dollars. 

Estimating  the  expenses  of  a  civil  nature,  both  domestic 
and  foreign,  for  the  year  1810,  at  the  same  amount  actually 
expended  for  those  objects  during  the  preceding  j^ear,  or  at 
about  -  -  -  -    '         -  -  -         1,500,000 

And  adding  thereto  the  annual  appropriation  of     -  -         8,000,000 

for  the  public  debt;  (of  which  sum  about  three  millions  se- 
ven hundred  and  fifty  thousand  dollars  will  be  applied  to  the 
final  reimbursement  of  the  exchanged  six  per  cent,  stock,)  it 
follows  that  unless  the  aggregate  of  the  expenses  for  the 
Military  and  Naval  establishments,  should  be  reduced  to 
about    "  -  -  -  -  -  -  3,000,001) 


$  12,500,000 

a  loan  will  be  necessary  to  make  up  the  deficiency.  That  state  of  the 
Treasury  had  been  anticipated;  and,  for  that  reason,  an  increase  of  duties 
had  been  respectfully  submitted  in  the  last  annual  report.  But  should  that 
measure  be  now  adopted,  it  would  not,  on  account  of  the  terms  of  credit  al- 
lowed for  the  payment  of  duties,  supersede  the  necessity  of  a  loan  for  the 
service  of  the  year  IS  10,  commensurate  with  the  extent  of  those  establish- 
ments, and  with  the  appropriations  which  may  be  made  for  their  support  by 
Congress.  No  precise  sum  is  suggested,  since  this  must  vary  according  to 
the  plans  which  may  be  adopted  in  relation  to  foreign  nations,  and  will  par- 
ticularly depend  on  the  decision  of  Congress  on  the  question  of  war  or 
peace.  It  is  sufficient  to  state,  that,  if  the  actual  expenditure  of  the  year 
1810,  for  all  military  and  naval  purposes,  should  be  estimated  at  the  same 
sum  which  was  disbursed  by  the  Treasury  for  those  objects  during  the 
year  ending  on  the  30th  September,  1S09,  and  exceeding,  as  above  stated, 
six  millions  of  dollars,  the  deficiency,  according  to  the  preceding  estimates, 
would  amount  to  three  millions:  on  which  supposition,  it  would  seem  pru- 
dent, in  order  to  provide  against  any  deficiency  in  the  receipts,  beyond  what 
has  been  estimated,  to  authorize  a  loan  of  four  millions  of  dollars. 

In  the  event  of  war,  the  necessity  of  rendering  it  efficient,  and  of  calling 
for  that  purpose  into  action  all  the  resources  of  the  country,  is  too  obvious 


1809.]  SECRETARY  OF  THE  TREASURY.  401 

to  require  any  comment.  On  that  subject  nothing  will,  at  this  time,  be  add- 
ed by  this  department  to  the  suggestions  respectfully  submitted  in  the  two 
preceding  annual  reports.  Loans  reimbursable  by  instalments,  and  at  fixed 
periods,  after  the  return  of  peace,  must  constitute  the  principal  resource 
for  defraying  the  extraordinary  expenses  of  the  war.  For  the  support  of 
public  credit,  the  basis  on  which  rests  the  practicability  of  obtaining  loans 
on  reasonable  terms,  it  appears  necessary  that  the  revenue  should,  in  the 
mean  while,  be  equal  to  the  interest  on  the  public  debt,  including  that  on 
the  new  loans,  and  to  all  the  current  expenses  of  government,  calculated  on 
a  peace  establishment,  or,  for  the  present,  to  about  eight  millions  of  dollars. 
An  immediate  and  considerable  increase  of  the  existing  duties  will,  it  is  be- 
lieved, be  requisite  for  that  purpose,  in  order  to  cover  the  defalcation  which 
a  maritime  war  must  necessarily  produce  in  a  revenue  almost  exclusively  de- 
pending on  commerce.  That  increase  appears  preferable,  in  the  present  situ- 
ation of  the  United  States,  to  any  other  source  of  taxation,  and  is  not,  in 
time  of  war,  liable  to  the  objection  of  its  encouraging  smuggling.  It  is  only 
in  the  event  of  that  revenue  being  still  more  affected  by  a  war  than  is  ap- 
prehended, that  a  resort  to  internal  taxes,  either  direct  or  indirect,  may  be- 
come necessary. 

If  war  should  not  be  resorted  to,  it  does  not  appear  requisite,  unless  Con- 
gress should  resolve  on  a  permanent  increase  in  the  military  and  naval  esta- 
blishments, in  time  of  peace,  to  lay,  at  present,  any  additional  duties, 
beyond  a  mere  continuance  of  the  two  and  a  half  per  cent,  known  under  the 
name  of  "  Mediterranean  Fund."  It  has  already  been  stated,that  an  increase 
of  the  impost  would  not  supply  the  deficiency  which  may  take  place  in  the 
year  1810:  and  exclusively  of  the  reimbursement  of  the  loan  which  may  be 
wanted  for  the  service  of  that  year,  all  the  national  expenses,  calculated  on  a 
peace  establishment  and  on  the  average  of  the  actual  expenditures  of  the  six 
years,  1802  to  1807,  will  not  exceed  ten  millions  of  dollars  for  the  year  1S1 1, 
and  eight  millions  after  that  year-  For  the  only  portion  of  the  existing 
debt,  which,  according  to  law,  it  will  be  practicable,  after  the  year  1S10,  to 
reimburse,  will,  exclusively  of  the  annual  reimbursement  of  the  six  per 
cent,  and  deferred  stocks,  consist  only  of  the  converted  six  per  cent,  stock, 
which  amounts  to  less  than  two  millions  of  dollars.  The  payments  on  ac- 
count of  the  annual  appropriation  of  eight  millions  of  dollars,  for  the  debt, 
cannot  for  that  reason  (except  for  the  purpose  of  reimbursing  the  loan  which 
may  be  wanted  for  the  service  of  the  year  1810,)  much  exceed  six  millions 
of  dollars  in  the  year  1811,  and  four  millions  of  dollars  annually  after  that 
year.  The  expenses,  for  the  year  1811,  and  the  ensuing  years,  may,  there- 
fore, if  calculated  on  a  peace  establishment,  be  estimated  as  followeth,  viz: 

Civil  expenses,  domestic  and  foreign,  -  -  $1,500,000 

•  Military  and  Naval  establishments,  (including  the  Indian 
Department,)  calculated  on  the  average  of  the  actual  expendi- 
ture for  those  objects  during  the  six  years,  1802 — 1S07,  as 
will  appear  by  statement  (F.)  about       -  2,500,000 

Interest  on  the  Public   Debt,   including   the  annual   reim- 
bursement on  the  six  per  cent,  and  deferred  stocks.,        -  4,100,000 


Total  of  the  annual  expenses  after  the  year  1S11,       -  S,100,000 

Reimbursement  of  the  converted  six  per  cent,  stock,  1,860,000 


Total  of  expenses  for  the  year  1811,  $  9,960,000 


402  REPORTS  OF  THE  [1809. 

Whatever  may  be  the  decision  of  Congress,  in  other  respects,  there  is  a 
subject  which  seems  to  require  immediate  attention.  The  provisions  adopt- 
ed for  the  purpose  of  carrying  into  effect  the  non-intercourse  with  England 
and  France,  particularly  as  modified  by  the  act  of  last  session,  under  an  ex- 
pectation that  the  orders  of  council  of  Great  Britain  had  been  revoked,  are 
inefficient,  and  altogether  inapplicable  to  existing  circumstances.  It  will 
be  sufficient  to  observe,that  exportation  by  land  is  not  forbidden,  and  that  no 
bonds  being  required  from  vessels  ostensibly  employed  in  the  coasting  trade, 
nor  any  authority  vested  by  law  which  will  justify  detention,  those  vessels 
daily  sail  for  British  ports,  without  any  other  remedy  but  the  precarious 
mode  of  instituting  prosecutions  against  the  apparent  owners.  It  is  unneces- 
sary, and  it  would  be  painful,  to  dwell  on  all  the  effects  of  those  violations 
of  the  laws.  But  without  any  allusion  to  the  efficiency  or  political  object 
of  any  systemTand  merely  with  a  view  to  its  execution,  it  is  incumbent  to 
state,  that  from  the  experience  of  the  two  last  years,  a  perfect  conviction 
arises,  that  either  the  system  of  restriction,  partially  abandoned,  must  be  re- 
instated in  all  its  parts,  and  with  all  the  provisions  necessary  for  its  strict 
and  complete  execution,  or  that  all  the  restrictions,  so  far  at  least  as  they  af- 
fect the  commerce  and  navigation  of  the  citizens  of  the  United  States,  ought 
to  be  removed. 

All  which  is  respectfully  submitted. 

ALBERT  GALLATIN, 

Secretary  of  the  Treasury. 

Treasury  Department,  December  7th,  1S09. 


1809.] 


SECRETARY  OF  THE  TREASURY. 


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404  REPORTS  OF  THE  [1809. 

B. 

STATEMENT  exhibiting  the  value  and  quantities,  respectively,  of 
Merchandise  on  which  duties  actually  accrued  .during  the  year  1808, 
[consisting  of  the  difference  between  articles  paying  duty,  imported, 
and  those  entitled  to  drawback,  re-exported,)  and,  also,  of  the  nett 
revenue  which  accrued,  during  that  year,  from  duties  on  Merchan- 
dise, Tonnage,  Passports,  and  Clearances. 

GOODS  PAYING  DUTIES  AD  VALOREM. 

*  $17,983,125,  at  12J  per  cent.  -.     $2,247,880  03 

2,622,478,  at  15  do         -  -  3.93,371   70 

66,647,  at  20  do  -  13,329  40 


'0,672,250 


a  Additional  duty  on  $1 9,71 1,370,  at  2h  per  ct.    492,784  25 

"3,147,365  38 
I  Spirits,  4,625,198  galls,  at  28.8  cts.  av.  1,333,473  71 
c   Sugar,     84,853,633  lbs.      at    2.6       do  2,219,489   96 

d  Wines,      1,315,233  galls,  at  30.4      do  400,484  53 

e   Teas,        4,800,142  lbs.     at20.3      do  973,153  57 

Coffee,    30,895,495  lbs.     at    5     cts.  1,544,774  75 

Molasses,  6,456,073  galls,  at     5     cts.  322,803  65 

g  All  other  articles,     -  -  841,687  37 

10,7S3,232  92 
f  Salt  deducted,  being  excess  of  bounties  and 
allowances  in  1S07,  paid  in  1808,  beyond 
the  duties  collected  154,396  20 

Deduct  duties  refunded,  after 
deducting  therefrom  duties 
collected  on  merchandise, 
the  particulars  of  which 
could  not  be  ascertained,  and 
difference  of  calculation  13,557  90 

—        167,954  10 


10,615,278  82 

3|  per  cent,  retained  on  drawbacks  9,145  19 

Extra  duty  of  10  per  cent,  on  merchandise  - 
imported  in  foreign  vessels  -  -    .         -  111,084  93 

Nett  amount  of  duties  on  merchandise  -  10,735,508  94 

Duties  on  tonnage    -  93,018  33 

Light  money  -  26,679  28 

119,697  61 

Duties  on  passports  and  clearances  -  -  684  00 

10,855,890  55 
Sundry  accounts  not  yet  received,  estimated  at      ■•  -  1,500  00 

Gross  revenue,  as  per  statement  A,  -  10,857,390  55 

Deduct  expenses  of  collection  -  543,227  14 

Nett  revenue         10,314,163  41 

■  Note. — 424  dollars  of  this  sum  is  merchandise  paying  a  duty  of  10  per  cent,  ad  valorem. 


1809.] 


SECRETARY  OF  THE  TREASURY. 


40; 


Explanatory  Statements  and  Notes. 


a   Additional  duty  of  2£  per  cent.               ... 

492,784  27 

3£  per  cent,  retained  on  drawbacks 

- 

475  79 

Extra  duty  of  10  per  cent. 

on  merchandise  imported  in  for 

sign  vessels 
Dollars, 

2,704  48 

495,964  54 

b    Spirits — 

Grain           *            1st 

proof,     173,080  gallons,  at  28 

cents 

48,462  40 

2d 

do              245      do             29 

do 

71  05 

3d 

do                80      do             31 

do 

24  80 

4th 

do         30,110      do             34 

do             i 

10,237  40 

Other  materials,  1st  &  2d  do       831,720      do            25 

do 

207,930  00 

3d 

do    2,061,255      do             28 

do 

577,151  40 

4th 

do    1,521,873      do             32 

do 

486,999  36 

5th 

do          6,835      do             38 

do 
Dollars, 

2,597  30 

4,625,198 

1,333,473  71, 

c    Sugar — 

Brown,  &c. 

-    65,223,807  pounds,  at  2J 

cents 

1,630,595  18 

White,  &c. 

-    19,629,826        do          3 

do 
Dollars, 

588,894  78 

84,853,633 

2,219,489  96 

Wines — 

Madeira,  1st  quality, 

65,902  gallons,  at  58  cents 

38,223  16 

'  2d      do 

29,091        do 

50      do 

14,545  50 

Sherry  and  St.  Lucar, 

265,800        do 

40      do 

106,320  00 

Oporto  and  Lisbon, 

80,147        do 

30      do 

24,044  10 

Burgundy  and  Champaign,                         744         do 

45      do 

334  80 

Teneriffe,  Fayal,  Malaga,  &c.             268,830         do 

28      do 

75,272  40 

Other,  in  bottles, 

22,160        do 

35      do 

7,756  00 

Do    in  casks, 

582,559         do 

23      do 
Dollars, 

133,988  57 

1,315,233 

400,484  53 

e    Teas — 

Bohea,           -            * 

642,209  pounds,  at  12  cents 

77,065  08 

Souchong, 

1,597,479        do 

18      do 

287,546  22 

Hyson, 

803,286        do 

32      do 

257,051  52 

Other  green, 

1,757,168        do 

20      do 

351,433  60 

Extra  duty  on  teas  imported  from 

other  places  than  India,                 '■"'-" 

Dollars, 

57  15 

_ 

4,800,142 

973,153  57 

/    Salt- 

Exported,     - 

585  bushels, 

at  20  cents 

117  00 

Amount  of    bounties    and   allow- 

ances,   $160,152 

55,    reduced 

into  bushels  at  5  bushels  the  dollar  800, 763 

160,152  60 

Total 

exported,  &c.  801,348 

160,269  60 

Imported,  bushels  of 

56  pounds,          48,945      do 
752,403 

at  12  cents 
Dollars, 

5,873  40 

k 

154,396  20 

406 


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j 809.]  SECRETARY  OF  THE  TREASURY. 

E. 


419 


STATEMENT  of  Receipts,  and  Payments,  at  the  Treasury  of  the* 
United  States,  from  the  1st  of  OcL  1808,  to  the  30th  Sept.  1809. 


Cash  in  the  Treasury  subject  to  warrant  October  1st, 
Received  for  the  proceeds  of  the  Customs, 
Internal  Revenues,        4,262  62 
Direct  tax,  8,458  95 


Sales  of  Public  Lands,  -  - 

Cents  and  half  cents  coined  at  the  Mint, 

Fees  on  Patents,  ... 

Stamp  duties,  and  Penalties,        .  -  - 

Fines,  Penalties,  and  Forfeitures, 

Seamen's  wages,  paid  to  Consuls  in  foreign  countries, 

Support  of  Marine  Hospital  (from  Navy  Department,) 

Debts  prior  to  the  present  constitution, 

Repayments,        ..... 


)9,   - 

$  13,846,717  52 

8,662,725  34 

12,721  57 

■ 

462,395  23 

7,376  53 

6,090  00 

20  35 

120  00 

448  66 

35,513   96 

152  80 

125,188  72 

9,315,753  16 

$23,162,470  68 

Payments  on  the  following  accounts: 
Civil  expenses,  both  foreign  anddomesiic,  viz: 
Civil  list  proper,         - 
Light  House  establishment, 
Marine  Hospital,         .... 
{nvalid  Pensioners,     -  -  -  - 

Public  buildings  in  Washington,  &  Furniture, 
Surveys  of  Public  Lands,       - 
Ascertaining  land  titles  in  Louisiana 

Mint  establishment^ 

Grants  of  Congress,  &  Miscellaneous  Claims, 
Intercourse  with  foreign  nations, 
Amer;can  claims  assumed  by  the  Louisiana 
Convention,  - 


Military  expenses,  viz : 
Pay,  subsistence,  clothing,  &c.  of  the  Army, 
Fortification  of  Ports  and  Harbors, 
Ordnance,   Arms,  Armories,  Arsenals,    Salt- 
petre, r  - 

Indian  Department, 

Navy  repairs  and  Contingencies, 
Ordnance-,  and  Arms,  - 

Navy  Yards,  - 

Marine  Corps,  - 

Pay,  Provisions,  and  other  expenses, 

Public  Debt. 
Interest  and  charges,  - 

Principal  discharged,  - 

Balance  in  the  Treasury  subject  to  warrant 
September  30th,  1809, 


54 


25,553  32 
16,127  71 


194,868  44 
70,230  10 


1,841,761  07 
755,000  00 

769,642  05 


756,307  91 
92,070  20 
70,881  62 
91,794  13 
71,100  00 


41,681  03 
25,634  00 
25,065  80 


265,098  54 


3,366,403  12 
292,303  84 


595,000  00 

105,000  00 

65,000  00 

185,954  70 

1,428,313  10 


3,126,149  15 
6,729,777  53 


Bollars 


1,439,633  23 


3,658,706  96 

2,379,267  80 

9,855,926  68 
5,828,936  01 


23,162,470  68, 


420 


REPORTS  OF  THE 


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810.]  SECRETARY  OF  THE  TREASURY.  421 

REPORT  OF  THE  FINANCES. 

DESEXOBER.  1810. 


In  obedience  to  the  directions  of  the  act  supplemental  to  the  act,  entitled 
ie  An  act  to  establish  the  Treasury  Department,"  the  Secretary  of  the  Trea- 
sury respectfully  submits  the  following  report  and  estimates. 

Revenue. 

The  nett  revenue  arising  from  duties  on  merchandise  and  tonnage,  which 
accrued  during  the  year  1808,  amounted  to  -  $  10,348,000 


The  nett  revenue  arising  from  the  same  sources,  which  ac* 
crued  during  the  year  1809,  amounted,  as  will  appear  by  the 
statement  (A.)  to         -----  $6,527,000 


The  statement  (B. )  exhibits,  in  detail,  the  several  species  of  merchandise 
and  other  sources  from  which  that  revenue  was  derived  during  the  year  1809. 

It  is  ascertained  that  the  nett  revenue  arising  from  the  same  duties,  has, 
for  the  three  first  quarters  of  the  year  1810,  exceeded  7,500,000  dollars;  and 
it  is  believed  that  it  will  not,  for  the  whole  year,  fall  short  of  twelve  mil- 
lions. 

The  sales  of  public  lands  north  of  the  river  Ohio,  have,  during  the  year- 
ending  on  the  30th  of  September,  1810,  as  appears  by  the  statement  (C.) 
amounted  to  159,000  acres,  and  the  payments  by  purchasers,  to  610,000 
dollars. 

The  same  statement  shows  that  the  total  amount  of  sales  from  the  establish- 
ment of  the  land  offices  in  the  year  1800,  to  the  30th  of  September,  1810,  have 
amounted  to  3, 168,000  acres,  which  have  produced  6,681,000  dollars;  of 
which  sum  1,646,000  dollars  remain  due  by  purchasers.  The  sales  in  the 
Mississippi  Territory,  being  (after  deducting  expenses,)  appropriated,  in  the 
first  place,  to  the  payment  of  1,250,000  dollars  to  the  State  of  Georgia,  are 
distinctly  stated. 

Receipts  and  Expenditures. 
1.     Year  ending  on  the  30th  September,   1810. 

The  actual  receipts  into  the  Treasury  during  the  year  ending  on  the  30th 
of  September,  1810,  have  amounted  to  -  -         $8,688,861    17 

Making,  together  with  the  balance  in  the  Treasury,  on 
the  1st  of  October,  1809,  and  amounting  to      -  -  5,828,936  01 

An  aggregate  of  -  -  -  -         $14,517,797  18 

The  disbursements  during  the  same  year  have  consisted  of  the  following 
items,  viz. : 

Civil  Department,  including  miscellaneous  expenses,  and  those  incident 
to  the  intercourse  with  foreign  nations,  $  1,249,200  06 

Military  and  Indian  Departments,  $2,514,523  75 

Navy,  -  1,674,735  50 

4,189,259  25 

Interest  on  the  public  debt,    -  2,735,898  91 


422  REPORTS  OF  THE  [1810. 

Total  current  expenses,  -  -       $8,174,358  22 

Payments  on  account  of  the  principal  of  the  public  debt,      2,884,409  24 


Amounting  together,  as  will  appear  more  in  detail  by 
the  statement  (E. )  to  -  11,058,767  46 

And  leaving  in  the  Treasury,  on  the  30th  September, 
1S10,  a  balance  of  3,459,029  72 


14,517,797   18 


It  therefore  appears,  that  the  actual  receipts  into  the  Treasury  have  ex- 
ceeded the  current  expenses  of  government,  including  therein  the  interest 
on  the  debt^by  a  sum  of  five  hundred  thousand  dollars.  The  expenses  had, 
during  the  preceding  year  exceeded  the  receipts  by  a  sum  of  thirteen  hun- 
dred thousand  dollars.  The  difference  arises,  not  from  an  increase  in  the 
receipts,  but  from  a  diminution  in  the  expenses,  particularly  those  of  the 
Military  and  Naval  Departments. 

2.     Last  quarter  of  the  year  1810. 

The  receipts  for  that  quarter  will,  it  is  believed,  be  more  than  sufficient  to 
defray  the  current  expenses  and  interest  on  the  debt  accruing  during  the 
same  period.  But  the  payments  to  be  made  on  account  of  the  principal  of 
the  debt,  in  order  to  complete  the  annual  appropriation  of  eight  millions  of 
dollars,  amounting  to  more  than  5,100,000  dollars,  a  loan  first  negotiated  for 
3,750,01)0,  and  afterwards  reduced  to  2,750,000  dollars,  became  necessarjr. 
The  receipts  and  disbursements  for  that  quarter  are,  therefore,  estimated  as 
follows: 

Receipts  into  the  Treasury  from  the  ordinary  revenue,  g  2,500,000 

Proceeds  of  the  loan  receivable  on  the  31st  December,  1S10,      2,750,000 
Balance  in  the  Treasury  on  the  1st  October,  1S10,  3,460,000 


Expenses,  civil,  military  and  naval,  estimated     $  1,570,000 
Interest  accruing  on  the  domestic  debt,         -  500,000 


8,710,000 


$2,070,000 


Payments  on  account  of  the  public  debt,  in  order  to  com- 
plete the  annual  appropriation  of  eight  millions,  and  including 
the  reimbursement  of  31st  December,  1810,  on  the  six  per 
cent,  and  deferred  stocks,  and  that  of  same  date,  of  3,751,125 
exchanged  six  per  cent,  stock,  -  4,640,000 


6,710,000 
Probsble  balance  in  the  Treasury  on  31st  December,  1810,  2,000,000 


8  8,710,000 


Fear  1811. 


The  outstanding  revenue  bonds,  after  deducting  the  expenses  of  collec- 
tion, and  allowing  for  bad  debts,  will  not,  probably,  on  the  1st  January,  1811, 
fall  short  of  eleven  millions  and  a  half  of  dollars,  the  actual  receipts  for  the 
year  1811,  on  account  of  the  sales  of  lands,  may  be  estimated  at  five  hun- 


1810.] 


SECRETARY  OF  THE  TREASURY, 


423 


dred  thousand:  and  it  is  presumed  that  the  portion  of  the  revenu^n'ising 
from  importations  subsequent  to  the  present  year,  which  will  be  recft'ed  in 
1811,  will  be  more  than  sufficient  to  pay  the  debentures  payable  i  that 
year.  The  actual  receipts  into  the  Treasury  during  that  year,  mav, here- 
fore,  be  estimated  at  $  12,j53,OoO 


Estimating  the  expenses  of  government  for  the  year  1811,  not  t  xceed 
the  amount  actually  expended  during  the  year  ending  on  the  30tqc  Sep- 
tember, 1810,  that  is  to  say — 

Expenses  of  a  civil  nature,  both  domestic  and  foreign,  $  ^20,000 

Military  and  Naval  Departments,  - 


And  adding  thereto  the  interest  on  the  public  debt,  estimated  at 

The  aggregate  of  the  current  expenses,  exclusively  of  the 
payments  on  account  of  the  principal  of  the  debt,  would  not 
exceed  -  -  -  -  -  - 

The  payments  on  account  of  the  principal  of  the  debt  will 
be  applicable  to  the  annual  reimbursement  on  the  six  per 
cent,  and  deferred  stocks,  to  the  re-payment  of  the  loan  of 
2,750,000  dollars  effected  this  year,  and  to  the  reimbursement, 
in  part,  of  the  converted  six  per  cent,  stock;  and  must,  in 
order  to  complete  the  annual  appropriation  of  eight  millions 
of  dollars,  amount  to  -  -  -  -    i 


10,000 


40,000 
50,000 


,80,000 


550,000 


Making  for  the  whole  amount  of  the  expenditures  of  the 
year  1811,     -  -  -  _  _  - 


-  g  1 530,000 


or  about  one  million  of  dollars  more  than  the  receipts  for  the  samesar. 

If,  therefore,  this  estimate  could  be  relied  on,  an  authority  to  boow  one 
million  of  dollars  would  be  sufficient  to  enable  government  to  pi  all  the 
current  expenses,  and  to  reimburse  nearly  four  millions  and  a  h,'  of  the 
principal  of  the  debt,  leaving  at  the  same  time  in  the  Treasury  a  lance  of 
two  millions  of  dollars,  a  sum  not  greater  than  what,  under  existii  circum- 
stances, it  is  eligible  to  reserve.  But  a  deficiency  may  take  placei  the  re- 
ceipts, if  the  amount  of  debentures  should  exceed  what  has  been  timated; 
and  the  expenses  for  the  Military  and  Naval  Departments,  (which,2Cording 
to  the  estimates  of  those  Departments,  and  exclusively  of  the  su  necessa- 
ry for  fortifications,  amount  to  4,916,000  dollars,)  may  be  greahthan  the 
amount  actually  expended  during  theyear  ending  on  the  30th  of  btember, 
1810.  In  order  to  provide  for  these  and  other  unforeseen  contingcies,  the 
propriety  of  authorizing  a  reloan,  not  exceeding,  in  the  whole,  5  amount 
of  the  principal  of  the  debt  reimbursed  during  the  same  year,  is  ipectfuily 
submitted. 


Public  Debt. 

It  appears  by  the  statement  (D.)  that  the  payments  on  acdnt  of  the 
principal  of  the  public  debt,  have  amounted,  during  the  year  etng  on  the 
30th  day  of  September,  1810,  to  2,884,000  dollars;  and  duig  the  nine 
years  and  a  half  ending  on  the  same  day,  to  near  37,700,000ollars;  ex- 
clusively of  more  than  six  millions  of  dollars  paid  in  conform^  with  ther 


424 


REPORTS  OF  THE 


[1810. 


provisjnjof  the  Convention  with  Great  Britain  and  of  the  Louisiana  Con- 
ventioi  | 

Talagi  the  calendar  year  1810,  by  itself,    the  principal  of  the  debt  actu- 
ally rehtyursed  will  amount  to  5,163,376  dollars — viz.: 

Amkl  reimbursement  of  six  per  cent,  and  deferred  stocks,     $  1,412,251 
ReiiDursement  of  the  six  per  cent,  exchanged  stock,     -  3,751,125 


Froiwhich,  deducting  the  loan  from  the  bank  of 


5.163,376 
2,750,000 


Leas,  for  the  actual  decrease  of  the  debt  during  the  year      $  2,413,376 

The  an  authorized  by  the  act  of  the  last  session  had  at  first  been  nego- 
tiated ;the  latter  end  of  May,  for  3,750,000  dollars;  but  the  expenses  hav- 
ing pre 'd less  than  had  been  supposed,  it  was,  by  mutual  consent,  reduced  in 
Octobeto  2,750,000.  With  that  object  in  view,  in  order  that  no  greater 
sum  shdd  be  ultimately  borrowed  than  might  be  necessary,  and  also,  in 
order  tivoid,  as  long  as  practicable,  an  increase  of  stock  in  the  market, 
and  thaSf  a  more  permanent  species  of  debt,  a  temporary  loan  from  the 
Bank  q  he  United  States  was  preferred  to  any  other  mode.  It  is  reim- 
bursabl  m  the  last  day  of  December,  1811,  with  a  reservation  that  the 
Bank  np,  in  case  of  a  non-renewal  of  its  charter,  demand  an  earlier  pay- 
ment, ([giving  three  months  notice;  This  condition  may,  if  enforced, 
save  so£  interest  to  the  public,  and  can  produce  no  inconvenience,  as  there 
will  beD  greater  difficulty  in  effecting  a  new  loan,  (if  necessary,)  in  the 
middle  pan  in  the  latter  end  of  the  year.  The  documents  F,  G,  H,  I, 
show  bc|  the  object  and  the  terms  of  the  loan. 

Fronyhat  has  been  stated,  it  appears  that  no  other  provisions  are  neces- 
sary for(e  year  1811,  than  a  continuance  of  the  additional  2§  per  cent,  du- 
ty, comimly  called  the  Mediterranean  Fund,  and  an  authority  to  borrow  a 
sum,  prpbly  much  less,  and  certainly  not  greater,  than  the  amount  of  the 
principaif  the  public  debt  which  will  be  reimbursed  during  the  year.  But, 
.as in  conrmity  with  the  act  of  1st  of  May,  1810,  the  importation  of  arti- 
cles, thetrowth,  produce,  or  manufacture  of  the  dominions,  colonies,  and 
dependelies  of  Great  Britain,  will  be  prohibited  after  the  2d  day  of  Februa- 
ry next,  i  that  nation  shall  not,  before  that  time,  so  revoke  or  modify  her 
,edicts,  afiatthey  shall  cease  to  violate  the  neutral  commerce  of  the  United 
States,  she  provisions  appear  necessary  for  the  purpose  of  supplying  the 
(deficiency  the  revenue  arising  from  that  cause,  and  of  giving  to  that  mea- 
sure all  t  efficacy  of  which  it  is  susceptible. 

The  pliable  defalcation  in  the  revenue  cannot,  for  obvious  reasons,  be  at 
this  time Itimated  with  any  degree  of  precision.  The  experience  of  the 
ensuing  jr  can  alone  afford  sufficient  data  for  a  permanent  and  detailed 
plan,  ada|d  to  that  state  of  things,  and  calculated  to  ensure  perseverance  in 
the  systerts  long  as  may  be  thought  proper.  But,  in  the  mean  while,  it 
appears  e^itial  to  lay  the  foundation  of  such  plan,  and  to  guard  in  time 
against  an  great  deficit  in  the  receipts  of  the  year  1812.  It  is  believed 
that,  unde^xisting  circumstances,  it  would  be  sufficient  to  render  those  re- 
ceipts ecplor  nearly  equal  to  the  current  expenditure,  including  therein 
theintcres|n  the  public  debt,  and  estimated  at  about  eight  millions  of  dol- 
lars: and,  th  a  view  to  that  object,  a  considerable  and  immediate  increase 
of  the  predt  duties  on  importations  is  respectfully  suggested. 


1810.]  SECRETARY  OF  THE  TREASURY.  4^5 

It  is  not  less  important  that  the  act  should  be  free  of  legal  diiulties  and 
of  well  founded  objections,  and  that  it  should  be  enforced  by  evy  practica- 
ble means.      On  that  subject,  the  following  observations  are  subitted: 

1.  The  law  of  1st  May,  1810,  has  neither  expressly  define  the  edicts, 
the  revocation  of  which  is  expected,  nor  made  a  notification  I  the  Presi- 
dent the  evidence  and  the  sole  evidence  of  the  fact.  It  folws,  that  in 
ease  of  an  unsatisfactory  modification  of  her  edicts  by  Great  Biain,  the  de- 
cision of  the  question  itself,  whether  the  non-importation  Wactually  in 
force  or  not,  will  be  left  to  the  courts;  whence  delays  and  enarrassments 
will  arise,  which  will  ^considerably  impede  the  operation  of  traaw. 

2.  The  non-importation  is  to  take  place  on  the  2d  day  of  Rruary  next, 
if  a  revocation  shall  not  have  taken  place  before  that  day.  |ut  this  may 
have  taken  place,  and  not  be  known  on  that  day  in  the  Unit!  States.  If 
the  Collectors  abstain  from  seizing  merchandise  imported  after  tit  day,  until 
the  fact  shall  have  been  ascertained,  and  the  edicts  shall  not  jve  been  re- 
voked, the  merchandise  will  escape  forfeiture,  and  the  law,  dftng  that  pe- 
riod, will  be  inoperative.  If  they  seize,  and  the  edicts  shall  a  ve  been  re- 
voked, the  seizures  will  have  been  illegal,  and  the  Collector sr ill  be  liable 
to  personal  suits.  This  inconvenience  may  be  remedied  by  Provision  di- 
recting that,  during  that  period,  it  shall  be  the  duty  of  the  Collcors  to  make 
seizures,  but  that  the  goods  shall  be  restored  to  the  parties  oitheir  giving 
bond  with  sureties  for  the  value. 

3.  No  exception  has  been  made  by  the  act  in  favor  of  ves;  s  which  had 
sailed  for  the  British  East  Indies  prior  to  the  President's  procmation;  and 
the  short  period  of  three  months  from  the  date  of  that  prochation  to  the 
day  when  the  law  is  to  take  effect,  will  occasion  forfeitures  (heavy  losses 
in  cases  of  bona  fide  American  property  in  England,  paid  :  or  ordered 
prior  to  the  proclamation.  It  seems,  in  every  point  of  viewsiigible,  that 
cases  clearly  foreseen  should  be  provided  for  by  law,  instead  being  left  to 
executive  discretion. 

4.  It  is  believed  that  an  abandonment  by  the  United  Stated  their  shar£ 
of  the  penalties  and  forfeitures  which  may  be  incurred,  and  t:  distribution 
of  these,  according  to  the  circumstances  of  the  case,  amongst  e  Collectors^ 
the  other  custom  house  officers,  the  Inspectors,  who  heretofo  have  had  no 
share,  and  the  informers,  would  ensure  a  greater  degree  of  ial  and  vigi- 
lance in  detecting  and  preventing  infractions  of  the  law. 

5.  Some  additional  provisions  will  be  necessary  to  enfce  the  law  on 
the  northern  frontier  of  the  United  States:  amongst  which  rmbe  reckoned,, 
the  erection  of  some  new  collection  districts,  particularly  (the  river  St. 
Lawrence,    and  in  the  eastern  part  of  the  State  of  Vermontm  increase  of 

non-importa- 
fees,  will  be 
considerably  reduced,  and  that  which  arises  from  commissns  altogether 
lost;  and  an  authority  to  the  armed  force  of  the  United  ;ates  to  make 
seizures,  And  it  must  be  added,  that  the  peculiar  situatio  of  those  dis- 
tricts will  render  condemnations  extremely  difficult,  unleshe  obligation 
be  imposed  on  persons  claiming  merchandise  seized  there,  torove  that  the 
same  was  legally  imported. 

All  which  is  respectfully  submitted. 

ALBERT  GLLATIN. 


salary  to  the  Collectors  in  that  quarter,  inasmuch  as,  under  tl 
tion,  that   part  of  their  compensation   which  is  derived  fro 


Treasury  Department,  December  lOfcL  1810. 


426 


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1810.1  SECRETARY  OF  THE  TREASURY.  437 


B. 

trJ  STATEMENT  exhibiting  the  value  and  quantities,  respectively ,  of 
Merchandise  on  which  duties  actually  accrued  during  the  year  1809- 
( consisting  of  the  difference  between  articles  paying  duty  import, 
ed,and  those  entitled  to  drawback,  re-exported,)  and  also,  the  net  I 
Revenue  which  accrued  during  that  year ,  from  duties  on  Merchandise, 
Tonnage,  Passports  and  Clearances. 

Goods  faying  duties  ad  valorem. 

19,458,378  dollars  at  12|  per  cent.         -  -  -      $2,432,297  25'.. 

4,783,116     do  15         do  '*    '        '-  717,467  40 

313,712     do  20        do  ...  62,742  40 

a  Additional  duty  on  $24,645,096  at  2|  per  ct.         61 6,127  40 


24,555,206          ..--..  3,828,634  45 

b  Spirits         4,644,469  gallons,  at  28.6  cents  (average)  1,327,058  58 

c  Sugar        12,381,320  pounds,  at    2.2  cents         do  273,925  03 

d  Wines            833,597  gallons,  at  45.7  cents         do  380,961  11 

Coffee         6,649,293  pounds,  at       5  cents  332,464  65 

Molasses     5,336,686  gallons,  at       5  cents  266,834  30 


From  which  deduct  the  following,  viz : 
e   Teas,  being  excess  of  exportations  beyond 

importations       -  -  -    43,666  97 

f  Salt,  being  excess  of  bounties  and  allowances 
in  1807,  paid  in  1809,  beyond  the  duties 
collected  ....    48,897  00 


6,409,878  12 


92,563  97 


6,317,314  15 
s-  All  other  articles         .....  61,621  92 


6,3/8,936  07 


Dedxict  duties  refunded,  after  deducting-  therefrom  duties 
collected  on  merchandise,  the  particulars  of  which 
could  not  be  ascertained,  and  difference  in  calculation  30.050  96 

6,348,885  31 

3  J  per  cent,  retained  on  drawbacks   ------  171,227  80 

Extra  duty  of  10  per  cent,  on  merchandise  imported  in  foreign  vessels         -  253,482  40 

Nett  amount  of  duties  on  merchandise                         ....  6,773,595  31 
Duties  on  tonnage       -----                 109,937  44 
Light  money                ......     42,045  69 

151,983  13 

Duties  on  passports  and  clearances    -             -             -             -             -             -  22,660  00 

6,948,238  44 

Sundry  accounts  not  yet  received,  estimated  at          ...            -  40,000  00 

Gross  revenue,  asper  statement  A.     ------  6,988,238  44 

Deduct  expenses  of  collection             -             -            -             -            -             -  494,998  02 

Nett  revenue    -            -            -        '    -            -            -            -  6,493,240  42 


55 


428 


REPORTS  OF  THE 

Explanatory  Statements  and  Notes. 


[1810. 


a  Additional  duty  of  2^  per  cent.       - 

3^  per  cent,  retained  en  drawbacks  .... 

Extra  duty  of  10  per  cent,  on  merchandise  imported  in  foreign  vessels 


Spirits — 
Grain 

Deduct  excess  of  exportations 
beyond  importations 


Other  materials 


$616,127  40 

3,413  88 

15,752  36 

635,293  64 


1st  proof         92,560 

gallons. 

at  28  cents 

25,916  80 

4th  proof             386 

do 

34  cents 

131  24 

92,174 

25,785  56 

1st  and  2d  proof     956,124 

do 

25  cents 

239,031  00 

3d   proof  2,219,211 

do 

28  cents 

621,379  08 

4th  proof  1,373,359 

do 

32  cents 

439,474  88 

5th  proof         3,355 

do 

38  cents 

1,274  90 

6th  proof             246 

do 

46  cents 

113  16 

4,644,469 


c  Sugar—.  I 

Brown         -  -  -  - 

White,  deduct  excess  of  exporta- 
tions beyond  importations 


d  Wines — 

Madeira,   1st  quality, 

2d       do 
Sherry  and  St.  Lucar, 
Oporto  and  Lisbon 
Burgundy  and  Champaign 
Teneriffe,  Fayal,  and  Malaga 


1,311,054 
Deduct  excess  of  exportation 

beyond  importations,  viz: 
Other,  in  bottles,   24,643  gals,  at  3 5  cts.    - 
do       in  casks,    452,814  do     23  cts. 


19,502,914  pounds,  at  2\  cents 
7,121,594      do  3  cents 


1 

2,381,320 

251,719 

gallons. 

at  58  cents 

31,243 

do 

50  cents 

334,801 

do 

40  cents 

201,864 

do 

30  cents 

210 

do 

45  cents 

491,217 

do 

28  cents 

8,625  05 
104,147  22 


477,457 

833,597 

g  Teas — 

Souchong,  excess  of  exportations  beyond  importations, 
850,012  pounds,  at  18  cents 
Deduct  excess  of  importations 

beyond  exportations,  viz: 
Bohea         69,864  lbs.  at  12  cts.         - 
Hyson         59,621  lbs.  at  32  cts.         - 
Oth  gr'n  403,025  lbs.  at  20  cts.         - 

Extra  duty  on  teas  imported  from  other  places  than  India    - 
532,510 


8,383  68 
19,078  72 
80,605  00 

1,411  79 


Excess  of  exportations  be 
yond  importations 


318,302 


1,327,058  58 

487,572  85 
213,647  82 
273,925  03 


145,997  02 
15,621  50 

133,920  40 

60,559  20 

94  50 

137,540  76 

493,733  38 


112,772  27 
380,961  11 


153,146  16 


109,479  19 
43,666  97 


/  Salt- 
Amount  of  bounties  and  allowances,  $48,940  18, 

reduced  into  bushels,  at  5  bushels  the  dollar,  244,701  bushels,  at  20  cents  $48,940  20 
•mported  bushels  of  56  pounds    -  360  bushels,  at  12  cents  43  20 

244,341  48,897  00 


1810.] 


SECRETARY  OF  THE  TREASURY. 


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SECRETARY  OF  THE  TREASURY. 


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1810.] 


SECRETARY  OF  THE  TREASURY. 


439 


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440  REPORTS  OF  THE  ["1810. 

F. 

At  a  meeting  of  the  Commissioners  of  the  Sinking  Fund,  held  on  the 
26th  day  of  April,  1810. 

Present — John  Gaillard,  President  of  the  Senate,  pro  tempore. 
Robert  Smith,  Secretary  of  State. 
Albert  Gallatin,  Secretary  of  the  Treasury 
Cesar  A.  Rodney,  Attorney  General  of  the  United  States. 
The  Secretary  of  the  Treasury  reported  to  the  Board — 

"  That  the  payments  to  be  made  during  the  present  year,  on  account  of 

the  interest  of  the  debt,  including  the  annual  reimbursement  of  six  per  cent. 

and  deferrecLstocks,  are  estimated  at         -  $4,100,000 

Leaving  a  sum  of        -  -  -  -  3,900,000 


in  order  to  complete  the  annual  appropriation  of  -  $8,000,000 

Which  the  market  price  of  stocks,  being  above  the  rate  fixed  by  law  for 
purchases,  can  only  be  applied  to  the  reimbursement  of  the  six  per  cent. 
exchanged  stock,  amounting  to  3,751,125  -f^  dollars,  in  conformity  with 
the  provisions  of  the  act  supplementary  to  an  act,  entiled  "  An  act  making 
provision  for  the  redemption  of  the  whole  of  the  public  debt  of  the  United 
States." 

Whereupon,  resolved,  That  the  residue  of  the  exchanged  six  per  cent, 
stock  be  reimbursed  during  the  present  year,  in  conformity  with  the  act  last 
mentioned. 

Signed — JOHN  GAILLARD,  President  of  the  Senate,  pro  tempore. 
ROBERT  SMITH,  Secretary  of  State. 
ALBERT  GALLATIN,  Secretary  of  the  Treasury. 
C.  A.  RODNEY,  Attorney  General  of  the  United  States. 
Attest — Edward  Jones,  Secretary  to  the  Commissioners  of  the  Sink, 
ing  Fund. 


G. 

James  Madison,  President  of  the  United  States  of  America,  to  Albert 
Gallatin,  Secretary  of  the  Treasury. 

By  virtue  of  the  act,  entitled  "  An  act  authorizing  a  loan  of  money  for 
a  sum  not  exceeding  the  amount  of  the  principal  of  the  public  debt,  reim- 
bursable during  the  year  one  thousand  eight  hundred  and  ten,"  passed  on 
the  first  day  of  May,  one  thousand  eight  hundred  and  ten. 

I  do  hereby  authorize  and  empower  you,  by  yourself,  or  any  other  person 
or  persons,  to  borrow,  on  behalf  of  the  United  States,  of  the  Bank  of  the 
United  States,  any  sum,  not  exceeding,  in  the  whole,  three  millions  seven 
hundred  and  fifty  thousand  dollars,  and  to  make,  or  cause  to  be  made  for 
that  purpose,  such  contract  as  shall  be  necessary,  and  for  the  interest  of  the 
said  States,  pursuant  to  the  act  aforesaid.  And  for  so  doing,  this  shall  be 
your  warrant. 

Given  under  my  hand,  at  Washington,  this  twenty-eighth  day  of  May,  in 
the  year  of  our  Lord  one  thousand  eight  hundred  and  ten. 

(Signed)  JAMES  MADISON. 


1810.]  SECRETARY  OF  THE  TREASURY.  441 

H. 

Articles  of  agreement  between  Albert  Gallatin,  Secretary  of  the  Treasu- 
ry of  the  United  States,  of  the  one  part,  and  the  President,  Directors,  and 
Company  of  the  Bank  of  the  United  States,  of  the  other  part,  made  and 
concluded  the  thirtieth  day  of  May,  one  thousand  eight  hundred  and  ten. 

Whereas,  by  the  act,  entitled  "  An  act  authorizing  a  loan  of  money  for  a, 
sum  not  exceeding  the  amount  of  the  principal  of  the  public  debt,  reimburs- 
able during  the  year  one  thousand  eight  hundred  and  ten/'  passed  the  first 
day  of  May,  eighteen  hundred  and  ten,  the  President  of  the  United  States 
is  authorized  and  empowered  to  borrow,  or  cause  to  be  borrowed  of  the 
Bank  of  the  United  States,  a  sum  not  exceeding  the  amount  of  the  principal 
of  the  public  debt,  reimbursable  during  the  year  one  thousand  eight  hun- 
dred and  ten: 

And,  whereas,  the  President  of  the  United  States,  by  his  warrant,  bear- 
ing date  the  twenty-eighth  day  of  May,  one  thousand  eight  hundred  and 
ten,  and  directed  to  the  said  party  of  the  first  part,  did  authorize  and  em- 
power him  to  contract  with  the  said  parties  of  the  second  part,  for  a  loan  of 
three  millions  seven  hundred  and  fifty  thousand  dollars,  in  conformity  with 
the  provisions  of  the  act  aforesaid: 

Now,  therefore,  these  presents  witness,  that  pursuant  to  the  authority 
aforesaid,  it  hath  been,  and  is  hereby  agreed,  by  and  between  the  said  par- 
ties of  the  first  and  second  part,  as  followeth — viz: 

First — The  said  President,  Directors,  and  Company,  shall  lend  to  the 
United  States,  the  sum  of  three  millions  seven  hundred  and  fifty  thousand 
dollars,  to  be  advanced  at  their  Banking  House  in  Philadelphia,  on  the  thir- 
ty-first day  of  December,  one  thousand  eight  hundred  and  ten. 

Second — The  said  sum  so  to  be  advanced  as  aforesaid,  shall  bear  interest 
at  the  rate  of  six  per  centum  per  annum,  from  the  date  before-mentioned^ 
payable  quarter  yearly  to  the  said  parties  of  the  second  part,  during  the  con- 
tinuance of  the  said  loan. 

Third — The  United  States  shall  reimburse,  or  repay  to  the  said  Bank  of 
the  United  States,  the  said  sum  of  three  millions  seven  hundred   and  fifty- 
thousand  dollars,  with  the  interest  which  may  be  due  thereon,  on  the  thirty- 
first  day  of  December,   one  thousand  eight  hundred  and  eleven;  reserving, 
nevertheless,  to  the  said  parties  of  the  second  part,  (in  case  they  do  not  ob- 
tain a  renewal  of  their  charter  at  the  next  session  of  Congress,)  the  ris;ht  to 
demand  and    receive  re-payment  at  an  earlier  period,  they  giving  three 
months  previous  notice  to  the  party  of  the  first  part,  of  such  their  intention. 
In  testimony  whereof,  the  said  Secretary  of  the  Treasury  hath 
caused  the  seal  of  the  Treasury  to  be  affixed  to  these  presents^ 
and  hath  hereunto  subscribed  his  hand;  and  the  said  Presi- 
***********   dent,  Directors,  and  Company,  have  also  caused  the  seal  of 

*  Sealofthe  *  the  Bank  of  the  United  States  to  be  affixed  to  the  same,   the 

*  ^easury.  *   day  and  year  aforeSaid. 

***********  (Signed)  ALBERT  GALLATIN, 

Secretary  of  the  Treasury. 

*********** 

*  Sealofthe*  (Signed)  D.LENOX, 
-*■  Bank  of  the  * 

%    U.  States.  %  President  of  the  Bank  of  the  United  States. 

%  -#- 

X  *  *  *-  #  *  *-  %  *  *  # 


442  REPORTS  OF  THE  [1810. 

I. 

"Whereas,  by  an  agreement  between  the  Secretary  of  the  Treasury  of  the 
United  States,  and  the  President,  Directors,  and  Company  of  the  Bank  of 
the  United  States,  dated  the  thirtieth  day  of  May,  one  thousand  eight  hun- 
dred and  ten,  it  was  stipulated  on  the  part  of  the  President,  Directors,  and 
Company  aforesaid,  that  they  would  lend  to  the  United  States  the  sum  of 
three  millions  seven  hundred  and  fifty  thousand  dollars,  to  be  paid  in  Phila- 
delphia, on  the  thirty-first  day  of  December,  one  thousand  eight  hundred 
and  ten: 

And,  whereas,  the  two  contracting  parties  have  lately  agreed  that  the 
amount  of  the  loan  stipulated  to  be  made  to  the  United  States  in  the  agree- 
ment before  recited,  shall  be  reduced: 

Now,  therefore,  these  presents  witness,  that  the  sum  to  be  loaned  to  the 
United  States  by  the  President,  Directors,  and  Company  of  the  Bank  of  the 
United  States,  on  the  thirty-first  day  of  December  ensuing,  shall  be  fixed  at 
two  millions  seven  hundred  and  fifty  thousand  dollars;  any  thing  in  the 
former  agreement  to  the  contrary  notwithstanding. 

In  testimony  whereof,   the  Secretary  of  the  Treasury  hath  caused  the 

**$*£#****   seal  °f  the  Treausry  to  be  affixed  to  these  presents,  and  hath 

*  *  hereunto  subscribed  his  hand;  and  the  President,   Directors, 

*  &mI  of  the*  an(j  Company  of  the  Bank  of  the  United  States,   have  also 

*  reasury'  *  caused  the  seal  of  the  said  Bank  to  be  affixed  to  the  same,  this 
**********  fifteenth  day  of  October,  one  thousand  eight  hundred  and  ten. 

(Signed)  ALBERT  GALLATIN, 

Secretary  of  the  Treasury. 

*********** 

*  Seal  of  the.  %  (Signed)  D.LENOX, 

*  Sank  of  the  * 

%  U.  States.  %  President  of  the  Bank  of  the  United  States. 

*  * 
*********** 


1811.]       SECRETARY  OF  THE  TREASURY.         443 

REPORT  ON  THE  FINANCES. 

NOVEMBER,  1811. 


In  obedience  to  the  directions  of  the  act  supplementary  to  the  act,  entitled 
"An  act  to  establish  the  Treasury  Department,"  the  Secretary  of  the  Trea- 
sury respectfully  submits  the  following  report  and  estimates. 

Receipts  and  Expenditures. 

1.    To  the  end  of  the  year  1S11. — The  actual  receipts  into  the  Treasury, 

during  the  year  ending  on  the  SOth  of  September,  1811,  have  consisted  of  the 

following  sums,  viz: 

Customs,  sales  of  lands,  arrears,  repayments,  and  all  other  branches  of  reve- 
nue, amounting  together,  as  appears  by  the  statement  (E.) 
to  -----  -  -  $13,541,446  37 

Temporary  loan  of  31st  December,  1810,  -  -      2,750,000  00 


Total  amount  of  receipts,  -  -  -$16,291,446  37 

Making,  together  with  the  balance  in  the  Treasury  on  the 

1st  of  October,  1810,  and  amounting  to  -  3,459,029  72 


An  aggregate  of-             -             -             -  -             -  $  1 9,750,476  09 

The  disbursements  during  the  same  year,  have  been  as  follows,  viz: 

Civil  Department,  including  miscellaneous  expenses,  and  those  incident  to 

the  intercourse  with  foreign  nations,        -  $1,360,858  98 

Army,  Fortifications,  Arms,  and  Arsenals,  $2,129,000 

Navy  Department,              -  2,136,000 

Indian  Department,             -             -             -  142,725 


4,407,725  00 

Payments  for  interest  on  the  public  debt,    -  2,225,800  93 

Total  current  expenses,      -----  $7,994,584  91 

Reimbursement  of  the  temporary  loan  (in  March  and  Sep- 
tember, 1811,)    -  -  -  -  -  -      2,750,000  00 

Payments  an  account  of  the  principal  of  the  public  debt,      -      5,058,272  82 


Amounting  together,  as  will  appear  more  in  detail  by  the 

statement  (E. )  to  -  $15,802,657  73 

And  leaving  in  the  Treasury,  on  the  30th  of  September, 

1811,  a  balance  of  -  -  -  -  3,947,818  36 


19,750,476  09 


The  actual  receipts,  arising  from  revenue  alone,  and  exclusively  of  the 
temporary  loan  since  reimbursed,  appear,  from  this  statement,  to  have  exceed- 
57 


444  REPORTS  OF  THE  flSll. 

ed  the  current  expenses,  including  therein  the  interest  paid  on  the  debt,  by 
a  sum  of  more  than  five  millions  and  a  half  of  dollars.  Butjthe  payments  on 
account  of  interest,  during  the  year  ending  on  the  30th  of  September,  1811, 
have,  from  an  unavoidable  delay  in  making  the  usual  remittances  to  Holland, 
faiien  short  of  the  amount  due  during  the  same  period;  and  the  real  excess  of 
receipts  arising  from  revenue,  beyond  the  current  expenses,  including  there- 
in the  interest  accrued  on  the  debt,   amounts  only  to  near  5,100,000  dollars. 

The  receipts  for  the  last  quarter  of  the  year  1811,  are  estimated  at 
3,300.000  dollars;  and  the  expenditures  (including  the  payments  of  arrears 
of  interest  and  near  2,160,000  dollars  on  account  of  the  principal  of  the  pub- 
lic debt)  at  4,300,000  dollars,  which  will  leave,  at  the  end  of  the  year,  a 
balance  in  the  Treasury  of  near  three  millions  of  dollars.  It  will  not,  there- 
fore, be  necessary  to  resort  for  the  service  of  the  present  year,  to  the  loan 
authorized  by  the  act  of  the  last  session  of  Congress. 

2.  Year  1812. — It  is  ascertained  that  the  nett  revenue  arising  from  duties 
on  merchandise  and  tonnage,  which  has  accrued  during  the  three  firstquarters 
of  the  year  1811,  exceedssix  millions  of  dollars;,  and  it  may,  for  the  whole 
year,  be  estimated  at  about  7,500,000  dollars. 

The  Custom-house  bonds  outstanding  on  the  1st  day  of  January,  IS  12,  and 
falling  due  in  that  year,  are  also  estimated,  after  deducting  bad  debts,  at 
7,500,000  dollars.  This  sum  may  therefore  be  assumed  as  the  probable 
amount  of  receipts  into  the  Treasury  during  the  year  1812,  on  account  of 
duties  on  merchandise  and  tonnage;  the  portion  of  the  revenue  arising  from 
importations  subsequent  to  the  present  year,  which  will  be  received  in  1812, 
being  considered  sufficient  to  pay  the  debentures  and  expenses  of  collection 
of  that  year. 

The  payments  made  by  purchasers  of  public  lands,  north  of  the  river  Ohio, 
having,  during  the  two  last  years,  after  deducting  the  expenses  and  charges 
on  that  fund,  amounted  to  near  600,000  dollars  a  year,  that  branch  of  reve- 
nue may,  for  the  present,  be  estimated  at  that  sum.  Allowing  one  hundred 
thousand  dollars  for  the  other  small  items  of  revenue,  which  will  consist  prin- 
cipally of  arrears  and  re-payments,  the  whole  amount  of  actual  receipts  into 
the  Treasury  during  the  year  1812,  may  therefore  be  estimated  at  $S,200,000. 

The  current  expenses  for  the  same  }^ear  are  estimated  as  followeth,  viz: 

1.  Expenses  of  a  civil  nature,  both  domestic  and  foreign,  1,260,000 

2.  Military  and  Naval  establishments,  according  to  the  esti- 
mates of  those  two  departments,  and  including  the  additional 
permanent  appropriations  for  the  purchase  of  arms  and  for 
Indian  annuities,  viz: 

Army  (including  32,000  dollars  for  the  Militia,)  $2,5S1,000 
Arsenals,  arms,  and  ordnance,      -  614,000 

Naval  Department,  -  2,500,000- 

Indian  Department,         -  -  -       220,000 


5,915,000 
3.   Interest  on  the  public  debt  2,225,000 


Amounting  together  to    -----        $9,400,000 

And  exceeding,  by  1,200,000  dollars,  the  probable  amount  of  receipts. 

This  deficit  may  be  paid  out  of  the  sum  of  three  millions  of  dollars  in  the 
Treasury.  But,  under  existing  circumstances,  it  does  not  seem  eligible  to 
exhaust  that  fund ;  and  the  estimate  of  receipts  being  also  liable  to  more  than 


1811.]  SECRETARY  OF  THE  TREASURY.  445 

usual  uncertainty,  the  propriety  of  authorizing  n  loan  sufficient  to  supply  that 
difference,  and  to  defray  such  other  extraordinary  expenses  as  may  be  incur- 
red during  the  year,  is  respectfully  submitted. 

It  must  at  the  same  time  be  observed,  that  the  sum  of  9,400,000  dollars, 
thus  stated  as  the  amount  of  current  expenses  for  the  year  1812,  includes,  in 
fact,  a  portion  of  extraordinary  expenses  arising  from  the  present  state  of  af- 
fairs For  if  the  Military  and  Naval  expenditure  had  been  estimated  at  a  sum 
not  exceeding  the  amount  actually  expended  for  those  objects  during  the  year 
ending  on  the  30th  of  September,  1811,  that  is  to  say,  at  4,400,000  instead 
of  5,900,000  dollars,  the  estimate  of  receipts  would  exceed  that  of  current 
expenses. 

The  disbursements  on  account  of  the  Naval  establishment  have  amount- 
ed, in  the  year  ending  on  the   30th   September,  1S10,  to  1,675,000 

And  in  the  year  ending  on  the  30th  September,  1511,  to  2.136,000 

They  are  estimated  for  the  year  1812,  at  -  -  2,500,000 

The  disbursements   on  account  of  the  Military  establish- 
ment have  amounted,  in  the  year  ending  on  the  30th  Septem- 
ber, 1810,  to  -  -  -  -  -  -  2,309,000 

And  in  the  year  ending  on  the  30th  September,  1811,  to  2,129,000 

They  are  estimated,  for  the  year  IS  12,  at  -  -  3,195,000 

But  the  detailed  annual  estimates  of  the  year  1812,  will  show  that  they 
are  predicated  on  the  employment  of  almost  the  whole  Naval  force,  and  of 
the  whole  Military  establishment  of  the  United  Slates,  as  authorized  by 
law;  covering,  besides  several  other  items,  all  the  expenses  of  more  than 
seventeen  thousand  effective  men  in  the  land  and  sea  service. 

With  respect  to  the  payments  on  account  of  the  principal  of  the  debt,  it 
is  evident  that  an  authority  to  borrow  a  sum  equal  to  that  which  will  be  re- 
imbursed during  the  year  1812,  will  be  necessary.  The  payments,  which, 
according  to  law,  must  be  made  during  that  year,  on  that  account,  consists  of 

1.  Annual  reimbursement  of  six   per  cent,  and  deferred 

stocks,  ...  .  .  _  .         jg  1,570,000  00 

2.  Reimbursement  of  the  residue  of  the  converted  stock        565,318  41 


Amounting  together,  to  -         $2,135,31S  41 


This  sum,  and  that  payable  for  interest,  amounting  together  to  4,360,000 
dollars,  leave,  in  order  to  complete  the  annual  appropriation  of  eight  mil- 
lions, a  balance  of  3,640,000  dollars,  which  can  be  applied  in  no  othei? 
manner  than  in  purchases  of  stock  at  the  prices  limited  by  law.  The 
amount  which  may  be  thus  applied,  is  therefore  uncertain. 

Public  Debt. 

It  appears,  by  the  statement  (D. )  that  the  payments  on  account  of  the 
principal  of  the  public  debt  will,  from  the  1st  of  October,  1810,  to  the  31st 
December,  1811,  have  exceeded  six  millions  four  hundred  thousand  dollars. 
With  the  exception  of  the  annual  reimbursement  of  the  six  per  cent,  and 
deferred  stocks,  there  will  remain,  at  the  end  of  the  year  1811,  no  other 
portion  of  the  public  debt  reimbursable  at  the  will  of  the  United  States, 
than  the  residue  of  converted  stock,  amounting,  as  above  stated,  to  565;00O 


446  REPORTS  OF  THE  ["1811. 

dollars,  and  which  will  be  paid  in  the  year  1812.  There  being  nothing 
afterwards  left,  on  which  the  laws  passed  subsequent  to  the  year  1801,  for 
the  redemption  of  the  debt,  can  operate,  a  general  view  of  the  result  and 
effect  of  those  laws  will  now  be  presented. 

Exclusively  of  near  three  millions  of  unfunded  debt  since  reimbursed,  as 
detailed  in  the  report  of  the.  18th  of  April,  1808,  the  public  debt  of  the 
United  States  amounted,  on  the  1st  of  April,  1801,  to  $79,926,999,  as  will 
appear  by  the  statement  (D  d.)  The  whole  amount  of  principal  extin- 
guished during  the  period  often  years  and  nine  months,  commencing  on  the 
1st  of  April,  1801,  and  ending  on  the  31st  of  December,  1811,  exceeds, 
forty-six  millions  of  dollars,  viz: 

Foreign  debt,  paid  in  full,         -  -  $10,075,004 

Eight  per  eent. ,  five  and  a  half  per  cent.,  four 
and  a  half  per  cent.,  and  Navy  six  per  cent. 
stocks;  and  temporary  loans  due  on  the  1st  of 
April,  1801,  to  the  Bank  of  the  United  States,  all 
paid  in  full,  -  -  -  -  12,657,700 

Six  per  cent,  and  deferred  stocks,  including  the 
exchanged  stock  reimbursed,         -  -  20,820,744 

Three  per  cent,  stock,  including  converted 
stock  reimbursed,  -  -  -  2,379,269 

Registered  debt,  and  debt  due  to  foreign  offi- 
cers, -  90,093 


: 46,022,810 

Leaving  the  amount  of  old  debt  unredeemed  on  the  1st  of 
January,  1812,     -  -  -  -  -  .         $33,904,189 

and  consisting  of  the  following  species,  viz: 

Six  per  cent,  and  deferred  stocks,  unredeemed 
amount,  -  17,067,096 

Three  per  cent,  stock,  -         16,157,890 

Converted  stock  -  -  565,318 


16,723,203 

1796  six  per  cent,  stock,           -             -  80,000 
Registered  debt,  and  debt  due  to  foreign  offi- 
cers,       -----  33,8S5 


$33,904,189 
And  to  which,  adding  the  Louisiana  six  per  cent,  stock,  being 

a  new  debt,  contracted  subsequent  to  the  1st  of  April,  1S01       11,250,000 


Makes  the  whole  amount  of   public  debt,  on  the  1st  of  Janu- 
ary, 1812         -  -  -  -  -  ...         45,154,189 

The  annual  interest  on  the  public  debt,  due  on  the  1st  April, 

1801,  amounts  to         -  $4,180,463 

The  annual  interest  on  the  public  debt,  extinguished  between 

the  1st  April,  1801, and  the  1st  January,  1812,  amounted  to        2,632,982 


Leaving,   for  the  amount  of  annual  interest,  on  the  old  debt 

unredeemed,  on  1st  January,  1812,      -  1,547,481 

The  annual  interest  on  the  Louisiana  stock  is       -  -  -     675,000 


Making  the  annual  interest  on  the  whole  debt,  due  on  the  1st 
January,  1812,  -  $2,222,481 


1811.1  SECRETARY  OF  THE  TREASURY.  447 

Which,  subtracted  from  the  annual  interest  on  the  debt   due 

on  1st  April,  1801        -----  4,180,463 


Leaves  for  the  difference  between  the  amounts  of  interest  re- 
spectively, payable  at  those  two  dates,  -  *  $1,967,942 


The  disposable  national  revenue,  or  that  portion  which  alone  is  applica- 
ble to  defray  the  annual  national  expenses,  consists  only  of  the  surplus  of 
the  gross  amount  of  revenue  collected,  beyond  the  amount  necessary  for 
paying  the  interest  on  the  public  debt.  A  diminution  of  that  interest  is, 
with  respect  to  the  ability  of  defraying  the  other  annual  expenses,  a  positive 
increase  of  revenue,  to  the  same  amount.  With  an  equal  amount  of  gross 
revenue^  the  revenue  applicable  to  defray  the  national  expenses,  is  now,  by 
the  effect  of  the  reduction  of  the  debt,  two  millions  six  hundred  thousand 
dollars  greater  than  on  the  1st  day  of  April,  1801.  Or,  if  another  view  of 
the  subject  be  thought  more  correct,  the  laws  for  the  reduction  of  the  debt 
have,  in  ten  years  and  nine  months,  enabled  the  United  States  to  pay  in  full, 
the  purchase  money  of  Louisiana,  and  increased  their  revenue  near  two  mil- 
lions of  dollars. 

If  the  amount  of  annual  payments,  on  account  of  both  the  principal  and 
interest  of  the  public  debt,  during  the  last  eight  years,  be  contrasted  with 
the  payments  hereafter  necessary  for  the  same  purpose,  the  difference  will  be 
still  more  striking.  Eight  millions  of  dollars  have  been  annually  paid,  on  that 
account,  during  those  eight  years.  The  whole  amount  payable  after  the  year 
1812,  including  the  annual  reimbursement  on  the  six  per  cent,  and  deferred 
stocks,  is  3,792,382  dollars;  making  an  annual  difference  of  more  than  four 
millions  two  hundred  thousand  dollars,  which  will  be  liberated  from  that  ap- 
propriation. And  this  annual  payment  of  about  three  millions  eight  hun- 
dred thousand  dollars,  would  have  been  sufficient,  with  some  small  varia- 
tions, to  discharge,  in  ten  years,  the  whole  of  the  residue  of  the  existing 
debt,  with  the  exception  of  the  three  per  cent,  stock,  the  annual  interest  on 
which,  amounts  only  to  four  hundred  and  eighty-five  thousand  dollars.  The 
aspect  of  the  foreign  relations  of  .the  United  States  forbids,  however,  the 
hope  of  seeing  the  work  completed  within  that  short  period.  The  redemp- 
tion of  principal  has  been  effected  without  the  aid  of  any  internal  taxes, 
either  direct  or  indirect,  without  any  addition  during  the  last  seven  years 
to  the  rate  of  duties  on  importations,  which,  on  the  contrary,  have  been  im- 
paired by  the  repeal  of  that  on  salt,  and  notwithstanding  the  great  diminu- 
tion of  commerce  during  the  last  four  years.  It  therefore  proves,  decisively, 
the  ability  of  the  United  States,  with  their  ordinary  revenue,  to  discharge,, 
in  ten  years  of  peace,  a  debt  of  forty-two  millions  of  dollars;  a  fact  which 
considerably  lessens  the  weight  of  the  most  formidable  objection,  to  which 
that  revenue,  depending  almost  solely  on  commerce,  appears  to  be  liable. 
In  time  of  peace,  it  is  almost  sufficient  to  defray  the  expenses  of  a  war;  in 
time  of  war,  it  is  hardly  competent  to  support  the  expenses  of  a  peace  es- 
tablishment. Sinking,  at  once,  under  adverse  circumstances,  from  fifteen 
to  six  or  eight  millions  of  dollars,  it  is  only  by  a  persevering  application 
of  the  surplus,  which  it  affords  in  years  of  prosperity,  to  the  discharge  of 
the  debt,  that  a  total  change  in.  the  system  of  taxation,  or  a  perpetual  accu- 
mulation of  debt  can  be  avoided.  But,  if  a  similar  application  of  such  sur- 
plus be  hereafter  strictly  adhered  to,  forty  millions  of  debt,  contracted  dur- 
ing five  or  six  years  of  war,  may  always,  without  any  extraordinary  exer- 
tions, be  reimbursed  in  ten  years  of  peace. 


448  REPORTS  OF  THE  [1811. 

This  view  of  the  subject,  has,  at  the  present  crisis,  appeared  necessary,  for 
the  purpose  of  distinctly  pointing  out  one  of  the  principal  resources,  within 
the  reach  of  the  United  States.  But  to  be  placed  on  a  solid  foundation,  it 
requires  the  aid  of  a  revenue,  "sufficient,  at  least,  to  defray  the  ordinary 
expenses  of  government,  and  to  pay  the  interest  on  the  public  debt,  includ- 
ing that  on  new  loans  which  may  be  authorized." 

Provision  for  the  ensuing  Years* 

The  revenue  is  derived  from  two  sources — the  duties  on  importations,  and 
the  sales  of  public  lands. 

The   nett  revenue,    arising  from  duties  on  merchandise   and    tonnage, 
which  accrued- during  the  year  1S09,  amounted  to  $6, 527,168.      The  nett 
revenue,  arising  from  the  same  sources,  which  accrued  during  the  year  1810, 
amounted,  as  will  appear  by  the  statements  A.  and  B.  to  $12, 513,490;  the 
same  revenue,  for  the  year  181 1,  is  estimated,  as  has  already  been  stated,  at 
$7,500,000.     A  portion  of  the  revenue  of  this  year,  having  been  collected 
on  British  merchandise,  imported  before  the  prohibition  took  effect,  the  per- 
manent  revenue,  arising   from  dunes  on  tonnage  and  merchandise,   will 
not  probably,  at  their  present  rate,  and  under  existing  circumstances,  ex- 
ceed        -  -  -  -  -  -  $6,000,000 

an  estimate  which  is  corroborated  by  the  view  of  the  subject  exhibited  in  the 
statement  (B  2.) 

The  sales  of  the  public  lands  north  of  the  river  Ohio,  have,  during  the  year 
ending  on  the  30th  September,  1811,  amounted,  as  appears  by  the  statement 
(C. )  to  207,000  acres,  and  the  payments  by  purchasers  to  600,000  dollars. 
It  has  already  been  stated  that  those  payments  on  the  average  of  the  two  last 
years,  amount,  after  deducting  the  expenses  and  charges  on  that  fund,  to  the 
annual  sum  of  600,000  dollars. 

The  sales  in  the  Mississippi  Territory,  being  in  the  first  instance  appro- 
priated to  the  payment  of  1,250,000  dollars  to  the  State  of  Georgia,  are 
distinctly  stated. 

The  permanent  revenue  or  annual  receipts,  after  the  year  1812,  calculated 
on  the  existing  state  of  affairs,  may  therefore  be  estimated  at      $  6,600,000 

Which,  deducted  from  the  annual  expenditures  calculated  on 
the  same  principle,  and  amounting  by  the  preceding  estimates 
for  the  year  1812,  to         -  9,200,000 


Leaves  a  deficiency  to  be  provided  for,  of         -  $  2,600,000 

An  addition  of  fifty  per  cent,  to  the  present  amount  of  duties,  (together 
with  a  continuance  of  the  temporary  duties  heretofore  designated  by  the 
name  of  "  Mediterranean  Fund,")  will  be  sufficient  to 'supply  that  deficien- 
cy, and  is  respectfully  submitted.  This  mode  appears  preferable  for  the 
present  to  any  internal  tax.  With  respect  to  the  sales  of  public  lands,  be- 
sides affording  a  supplementary  fund  for  the  ultimate  redemption  of  the  pub- 
lic debt,  they  may,  without  anj)  diminution  of  revenue,  be  usefully  applied 
as  a  bounty  to  soldiers  enlisting  in  the  regular  service,  and  in  facilitating  the 
terms  of  loans.  But  it  does  not  appear  that  the  actual  receipts  into  the  Trea- 
sury, arising  from  the  sales,  can  be  materially  increased,  without  a  reduction 
in  the  price,  unless  it  be  by  an  attempt  to  offer  certain  portions  for  sale  in  the 
large  cities  of  the  Union. 


1811.1  SECRETARY  OF  THE  TREASURY.  449 

The  same  amount  of  revenue  would  be  necessary,  and  with  the  aid  of 
Joans  would,  it  is  believed,  be  sufficient  in  case  of  war.  The  same  increase 
of  duties  would  therefore  be  equally  necessary  in  that  event.  Whether  it 
would  be  sufficient  to  produce  the  same  amount  of  revenue,  as  under  exist- 
ing circumstances,  cannot  at  present  be  determined.  Should  any  defi- 
ciency arise,  it  may  be  supplied  without  difficulty,  by  a  further  increase  of 
duties,  by  a  restoration  of  that  on  salt,  and  a  proper  selection  of  moderate 
internal  taxes.  To  raise  a  fixed  revenue  of  only  nine  millions  of  dollars,  is 
so  much  within  the  compass  of  the  national  resources,  so  much  less  in  pro- 
portion than  is  paid  by  any  other  nation,  that  under  any  circumstances  it  will 
only  require  the  will  of  the  Legislature  to  effect  the  object. 

The  possibility  of  raising  money  by  loans  to  the  amount  which  may  be 
wanted,  remains  to  be  examined.  For  the  fact  that  the  United  States  may 
easily,  in  ten  years  of  peace,  extinguish  a  debt  of  forty-two  millions  of  dol- 
lars, does  not  necessarily  imply  that  they  could  borrow  that  sum  during  a 
period  of  war. 

In  the  present  state  of  the  world  foreign  loans  may  be  considered  as  near- 
ly unattainable.  In  that  respect,. as  in  all  others,  the  United  States  must 
solely  rely  on  their  own  resources.  These  have  their  natural  bounds,  but 
are  believed  to  be  fully  adequate  to  the  support  of  all  the  national  force  that 
can  be  usefully  and  efficiently  employed. 

The  ability  and  will  of  the  United  States  faithfully  to  perform  their  engage- 
ments, are  universally  known;  and  the  terms  of  loans  will,  in  no  shape  what- 
ever, be  affected  by  want  of  confidence  in  either.  They  must,  however,  de- 
pend not  only  on  the  State  of  public  credit,  and  on  the  ability  to  lend,  but 
also  on  the  existing  demand  for  capital  required  for  other  objects.  What- 
ever this  may  be,  the  money  wanted  by  the  public  must  be  purchased  at  its 
market  price.  Whenever  the  amount  wanted  for  the  service  of  the  year,  or 
the  whole  amount  of  stock  in  the  market  shall  exceed  certain  limits,  it  may 
be  expected  that  legal  interest  will  not  be  sufficient  to  obtain  the  sums  re- 
quired. In  that  case,  the  most  simple  and  direct  is  also  the  cheapest  and 
safest  mode.  It  appears  much  more  eligible  to  pay  at  once  the  difference, 
either  by  a  premium  in  lands,  or  by  allowing  a  higher  rate  of  interest,  than 
to  increase  the  amount  of  stock  created,  or  to  attempt  any  operation  which 
might  injuriously  affect  the  circulating  medium  of  the  country.  This  dif- 
ficulty, and  it  is  the  only  serious  one  which  has  been  anticipated,  will  not  in- 
deed, if  analyzed,  appear  very  formidable.  For  to  take  an  extreme  case,  and 
supposing  even  forty  millions  of  dollars  to  be  borrowed  at  eight  instead  of 
six  per  cent,  a  year,  the  only  difference  would  consist  in  the  additional  pay- 
ment of  eight  hundred  thousand  dollars  a  year,  until  the  principal  was  reim- 
bursed: a  payment  inconvenient,  indeed,  and  to  be  avoided  if  practicable,, 
but  inconsiderable  if  compared  either  with  the  effects  of  other  means  of 
raising  money,  or  with  some  other  branches  of  the  public  expenditure. 

It  appears  from  the  preceding  estimates,  that  nothing  more  ma)'  be  strictly 
wanted  for  the  defraying,  during  the  year  1812,  the  expenses  as  yet  author- 
ized by  law,  than  an  authority  to  borrow  a  sum  equal  to  that  which  may  be 
reimbursed  on  account  of  the  principal  of  the  public  debt. 

With  a  view  to  the  ensuing  years,  and  considering  the  aspect  of  public  af- 
fairs presented  by  the  Executive,  and  the  measures  of  expense  which  he  has 
recommended,  it  has  been  attempted  to  show — 

1.  That  a  fixed  revenue  of  about  nine  millions  of  dollars  is  necessary,  and 
sufficient,  both  under  the  existing  situation  of  the  United  States,  and  in  the 
event  of  their  assuming;  0  different  attitude. 


450  REPORTS  OF  THE  [1811, 

2.  That  an  addition  to  the  rate  of  duties  on  importations  is  at  present  suf- 
ficient for  that  purpose,  although  ,in  the  course  of  events,  it  may  require  some 
aid  from  other  sources  of  revenue. 

3.  That  a  just  reliance  may  be  placed  on  obtaining  loans  to  a  considerable 
amount,  for  defraying  the  extraordinary  expenses  which  may  be  incurred  be- 
yond the  amount  of  revenue  above  stated. 

4.  That  the  peace  revenue  of  the  United  States  will  be_sufficient,  without 
any  extraordinary  exertions,  to  discharge,  in  a  few  years,  the  debt  which  may 
be  thus  necessarily  incurred. 

All  which  is  respectfully  submitted. 

ALBERT  GALLATIN, 
Treasury  Department, 

-November  22d,  181 L 


1811.] 


SECRETARY  OF  THE  TREASURY. 


451 


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45£  REPORTS  OF  THE  [1811. 

B. 

Ji  STATEMENT  exhibiting  the  value  and  quantities,  respectively,  of 
Merchandise^  on  which  duties  actually  accrued  during  the  year  1810, 
{consisting  of  the  difference  between  articles  paying  duty,  imported, 
and  those  entitled  to  drawback,  re-exported,)  and,  also,  the  nett  re- 
venue which  accrued,  during  that  year,  from  duties  on  Merchandise, 
Tonnage,  Passports,  and  Clearances. 

Goods  paying  duties  ad  valorem. 

$39/714,120             at      12^  per  cent.        -             -  $4,964,265  00 

7,703,290              at      15         do  1,155,493  50 

552,151              at       20          do              -  110,430  20 
Additional  duty  on  $47,806,962,  at  2§ 

percent.          -             -             -  1,195,174  05 


47,969,561 


b  Spirits,         4,487,588  gallons,  at  2S.3 

c  Sugar,         29,312,307  pounds,  at    2.5 

d  Wines,  1,164,592  gallons,  at  34.8 

e  Teas,  6,647,726  pounds,  at  19.8 

Coffee,  5,852,082  pounds,  at    5 

Molasses,      7,651,682  gallons, at     5 
f  All  other  articles, 


From  which  deduct  bounties  and  allowances   paid   in 
1810,     -  -  -  -  -    2,26S  05 

Duties  refunded,  after  deducting  therefrom 
duties  collected  on  merchandise,  the  par- 
ticulars of  which  could  not  be  ascertain- 
ed, and  difference  in  calculation,  31,082  20 


$7,425,362  75 

cents 

average, 

1,272,063  44 

do 

do 

743,656  08 

do 

do 

405,024  41 

do 

do 

1,314,091    17 

cents 

292,604   10 

cents 

382,584   10 

- 

- 

660,276  89 

$12,495,662   94 


33,350  25 


12,462,312  69 
Three  and  a  half  per  cent,  retained  on  drawback,                           139,489  33 
Extra  duty  of  10  per  cent,  on  merchandise  im- 
ported in  foreign  vessels,         !._,__                87,779  69 


Nett  amount  of  duties  on  merchandise,  $12,689,5S1   71 

Duties  on  tonnage,  -  127,697  40 

Light  money,  -  41,463  84 


169,161   24 

Duties  on  passports  and  clearances,  -  -  23,428  00 

$12,882,170   95 
Sundry  accounts  not  yet  received,  estimated  at  40,000  00 

Gross  revenue,  as  per  statement  A,  -  -  -      12,922,170  95 

Deduct  expenses  of  collection,     -  -  -  -  •         439,382  87 

Nett  revenue,-     -  $  12,482, 78S  08 

Treasury  Department,  Register's  Office,  Nov.  9th,  1811. 

JOSEPH  NOURSE,  Hegister. 


1811.] 


SECRETARY  OF  THE  TREASURY. 

Explanatory  Statements  and  Notes. 


453 


«  Additional  duty  of  2|  per  cent. 

$  1,195,174  05 

3^  per  cent,  retained  on  drawback,       - 

- 

- 

- 

3,832  51 

Extra  duty  of  10  per  cent,   on  m 

erchandise  imported  in  f< 
19,292  gallons,  at  28 

n-eign 
cents, 

vessels 

2,427  86 

1,201,434  42 

b  Spirits — from  grain,  1st    proof, 

5,401  76 

2d      do 

921       do 

29 

. 

267  09 

3d       do 

85,954      do 

31 

- 

26,645  74 

4th     do 

31,064      do 

34 

- 

10,561  76 

5th     do 

1,756       do 

40 

. 

702  40 

Other  materials,  1st  &  2d      do 

969,569       do 

25 

. 

242,392  25 

3d      do 

2,389,980      do 

28 

- 

669,194  40 

4th     do 

982,362       do 

32 

. 

314,355  84 

5th     do 

6,690       do 

38 

its 

2,542  20 

4,487,588 

1,272,063  44 

c   Sugar — Brown,                 27,142,626  pounds,  at  2£  cei 

678,565  65 

White,                   2,169,681       do            3 

is,  a 

t  58  cents, 

65,090  43 

29,312,: 

07 

743, 1 56  08 

d  Wines — Madeira,  1st  quality, 

238,354   galloi 

138,245  32 

do        2d       do 

31,222       do 

50 

15,611  00 

Sherry  and  St.  Lucar, 

54,318      do 

40 

21,727  20 

Oporto  and  Lisbon, 

121,644      do 

30 

36,493  20 

Burgundy  and  Champaign 

,                  932       do 

45 

419  40 

Teneriffe,  Fayal,  and  Malaga,       531,475       do 

28 

148,813  00 

Other,  in  bottles, 

6,554       do 

35 

2,293  90 

do     in  casks, 

180,093       do 

23 

41,421  39 

1,164,592 

405,024  41 

e  Teas — Bohea, 

1,349,520  pounds, 

at 

12  cents, 

161,942  40 

Souchong, 

2,248,102         do 

18 

404,658  36 

Hyson, 

972,099        do 

32 

311,071  68 

Other  green,     - 

2,178,005        do 

20 

435,601  00 

Extra  duty  on  teas  import- 

ed from  other  places 

than  India, 

- 

817  7i 

6,747,726 

1,314,091  17 

454 


REPORTS  OF  THE  r\  g 1 1 . 

Explanatory  Statements  and  Notes — Continued. 


Quantities. 

Rate  of 

_.| 

1 1» 

Excess  ot 

/  All  other  articles. 

Excess  of 

Excess  of 

duty. 

duties  over 

drawback 

importations 

over  expor- 

tations. 

exporta- 
tion over 
importa- 

Cents. 

drawback. 

over  duties. 

tions. 

Domestic  spirits,  1st  proof,  galls. 

144 

7 

10  08 

2d    do         do 

. 

. 

8 

Beer,         -            -                   do 

155,218 

- 

8 

12,417  44 

Cocoa,       -        —  -             pounds 

!      1,843,716 

. 

2 

36,874  32 

Chocolate,              -             -       do 

2,633 

- 

3 

78  99 

Sugar,  candy,        -             -       do 

2,379 

*. 

Hi 

273  58 

loaf,             -                    do 

271 

. 

9 

24  39 

other,  refined  &,  lump,  do 

I                  32 

. 

6i 

2  08 

Almonds,               -                   do 

61,783 

- 

2 

1,235  66 

Currants,                -                   do 

28,829 

. 

2 

576  58 

Prunes  and  plums,             -      do 

J           17,274 

. 

2 

345  48 

Figs,          -            -            -do 

336,258 

- 

2 

6,725  16 

Raisins,  jar,            -            -      do 

|         412,217 

- 

2 

8,244  34 

other,        -                   do 

- 

96,715 

H 

- 

1,450  72 

Candles,  tallow,    -                   do 

!          37,072 

- 

2 

741  44 

wax,  or  spermaceti,  do 

1,223 

- 

6 

73  38 

Cheese,     -            -                   do 

36,277 

- 

7 

2,539  39 

Soap,         -            -            -do 

94,117 

- 

2 

1,882  34 

Tallow,      -            -            -      do 

153,255 

. 

H 

2,298  82 

Mace,         -             -                    do 

13,993 

- 

125 

17,491  25 

Nutmegs,  -            -                   do 

14,990 

. 

50 

7,495  00 

Cinnamon,              -                    do 

540 

. 

20 

108  00 

Cloves,      -             -                    do 

21,247 

. 

20 

4,249  40 

Pepper,     -            -                   do 

988,856 

. 

6 

59,33.  36 

Pimento,                -                   do 

512,739 

. 

4 

20,509  56 

Chinese  cassia,      -                   do 

190,599 

- 

!      4 

7,623  96 

Tobacco,  -             -                    do 

1,521 

. 

6 

91  26 

SnufF,        -            -                   do 

1,633 

. 

10 

163  30 

Indigo,      -            -            -      do 

- 

33,048 

25 

. 

8,262  00 

Cotton,      -            -                   do 

- 

468,932 

3 

. 

14,067  96 

Powder,  hair,        -                   do 

30 

. 

4 

1  20 

gun,        -            -      do 

21,768 

- 

4 

870  72 

Starch,       -            -            -      do 

8,407 

_ 

3 

252  21 

Glue,         -            -                   do 

81,127 

. 

4 

3,245  08 

Pewter  plates  and  dishes,         do 

7,862 

. 

4 

314  48 

Iron,  anchors  and  sheet,           do 

852,949 

- 

H 

12,794  23 

slit  and  hoop,            -      do 

759,337 

- 

i 

7,593  37 

Nails,         -             -                    do 

2,112,223 

. 

2 

42,244  46 

Spikes,      -             -                    do 

280,215 

. 

1 

2,802  15 

Quicksilver,           -                   do 

1,966 

. 

6 

117  96 

Ochre,  in  oil,         -            -      do 

10,808 

- 

n 

162  12 

dry,             -                   do 

66,300 

. 

i 

663  00 

Spanish  brown,      -                   do 

913,909 

. 

i 

9,139  09 

White  and  red  lead,           -      do 

2,525,273 

- 

2 

50,505  46 

Lead,         -            -"                  do 

1,525,599 

- 

1 

15,255  99 

Seines,       -            -            -      do 

2,482 

. 

4 

99  28 

Cordage,  tarred,    -            -      do 

677,405 

. 

2 

13,548  10 

untarred,            -      do 

90,188 

- 

n 

2,254  70 

Cables,      -            -                   do 

104,213 

. 

2 

2,084  26 

Steel,         y           -            -     cwt. 

11,043 

. 

100 

11,043  00 

Hemp,       -            -                    do 

178,473 

- 

100 

178,473  00 

Twine,       -             -            -      do 

2,925 

400 

11,700  00 

Glauber  salts,         -            -      do 

133 

200 

266  00 

Coal,          -  '          -              bushels 

392,857  1 

- 

5 

19,642  85 

1811.]  SECRETARY  OF  THE  TREASURY. 

Explanatory  Statements  and  Notes — Continued. 


455 


/  All  other  articles — continued. 


Malt, 

Fish,  dried, 
Pickled  salmon,     - 

mackerel, 

other. 


bushels 

quintals 

barrels 

-      do 

do 


Glass  bottles,  (black  quart)  gross 
Window,  not  above  8  by  10,  lOOsq.ft 
do     do     10  by  12      do 
all  above  10  by  12     do 
Segars,      -  -  -      M. 

Lime,  ...  casks 
Boots,  ...  pairs 
Shoes,  silk,  -  -      do 

kid  and  morocco,         do 
other,         -  do 

Cards,  wool  and  cotton,      dozens 
playing,     •  packs 


Quantities. 


Excess  of 

importations 

over  expor- 

tations. 


107 

7,333 

4,398 

4.377 

1,905 

20,104 

19,906 

4,449 

4,669 

15,263 

52 

1,095 

1,754 

10,289 

723 

5 

1,928 


Excess  of 
exports 
tions  over 
importa 
tions. 


Rate  of 
duty. 

Cents, 


10 

50 

100 

60 

40 

60 

160 

175 

225 

200 

50 

75 

25 

15 

10 

50 

25 


Excess  of 
duties  over 
drawback. 


10  70 

3,666  50 

4,398  00 

2,626  20 

762  00 

12,062  40 

31,849  60 

7,785  75 

10,505  25 

30,526  00 

26  00 

821  25 

438  50 

1,543  35 

72  30 

2  50 

482  00 


684,057  57 
23,780  68 

660,276  89 


Excess  of 
drawback 
over  duties. 


23,780  68 


456 


REPORTS  OF  THE 


[1811. 


B  2. 

t/2  STATEMENT  of  the  Duties  which  accrued  on  the  principal  articles 
imported  from  Great  Britain  and  her  dependencies,  during  the  year 
1810,  with  an  estimate  of  the  debentures  issued  on  the  same  articles, 
deduced  from  a  comparison  ivith  the  whole  amount  of  duties  accruing, 
and  debentures  issiced,  during  the  same  year,  on  all  articles  of  the 
same  description,  imported  from  all  countries. 


9 

Ad  valorem. 

Spirits. 

Cotton, 

spices, & 

Indigo 

Sundries. 
a. 

Gross  amount  of  duties  on  ar- 
ticles imported  from  all  coun- 
tries            -             -     dolls. 

Deduct  gross  amount  of  de- 
bentures  issued  on  the  ex- 
portation of  such  articles 

8,121,337 

656,773 

1,315,085 
33,323 

681,414 
563,601 

283,778 
10,700 

Nett  revenue,         dolls. 

7,464,564 

1,281,762 

117,813 

273,078 

Gross  amount   of    duties   on 
such  of  the  same  articles  as 
were  imported  from    Great 
Britain  and  dependencies     - 

Deduct  estimated  amount  of 
debentures  on  the  exporta- 
tion of  such  of  the  said  arti- 
cles as  were  of  British  im- 
portation    - 

6,174,510 

499,510 

561,893 
14,893 

192,710 
159,710 

244,244 
9,244 

Estimated  nett  revenue  on  ar- 
ticles imported  from  Great 
Britain  and  dependencies     • 

5,675,000 

547,000 

33,000 

236,000 

Nett  revenue,  as  per  statement  A,  for  1810 
Deduct       do         do      on  articles  imported  from  Great 
Britain  and  dependencies,  viz: 

On  merchandise  ad  valorem  -  $5,675,000 

spirits  ...        547,000 

cotton,  spices,  and  indigo  -  33,000 

sundries  -  -  -        236,000 


$12,513,000 


Nett  revenue,  after  deducting  that  arising  from  British  im- 
portations - 


6,491,000 
$  6,022,000 


a  Consisting  of  beer,  pewter,  anchors,  sheet,  slit,  and  hoop  iron,  nails  and  spikes,  paints, 
lead,  and  manufactures  of  lead,  steel,  twine,  and  packthread,  glass,  coal,  and  fish.  Some 
small  items,  not  exceeding  $10,000,  are  omitted. 

jjote. — Sugar,  coffee,  and  molasses,  are  not  included,  as  the  whole  quantity  wanted  for  do- 
mestic consumption  will  be  supplied  from  other  countries. 


1811.] 


SECRETARY  OP  THE  TREASURY. 


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SECRETARY  OF  THE  TREASURY. 


465 


Notes  to  Statement  D  d. 

a  Interest  extinguished  on  $2,379,269  34,  at3  per  cent.  $  71,378  08 
Deduct  interest  increased,  3  per  cent,  on  3-565,318  41 

converted  6  per  cent,  stock  outstanding-,     -             -  16,959  55 

Diminution  of  interest  on  three  per  cent  stock,          -  54,418  53 

b   Six  per  cent,  and  deferred  stocks,    1st  Jan.  1801: 
Nominal  amount,  exclusive  of  the  Sinking-  Fund,      - 
The   previous    reimbursements   by  the  accounts  of 

receipts   and  expenditures,  amounted  to    - 
Deduct  for  an  error,  inserted  in  the  ac'ts  for  the  year  1803, 


But  of  that  reimbursement  there  had  been  paid  on 
stock  transferred  to  the  Sinking-  Fund,  a  sum  of     - 

Leaving  for  the  reimbursement  on  the  above  stated 
nominal  amount,       -  -  -  - 

And   making  for  the  unredeemed   amount,  as  per 

report  of  April,  1808, 
The  reimbursement  paid  on  31st  March,  1801,  was 
Unredeemed6  per  cent,  and  deferred,  on  1st  April,  1801, 
The  payments  of  principal  from  1st  April,  1801,  to 
Jtmuary  1st  1812,  are  as  follows: 
1.  Annual  reimbursements  from  1st  Jan.  1801,  to  1st 
Jan.  1811,  per  pi-inted  accounts  of  Receipts  and  Ex- 
penditures, ..... 
Deduct  reimbursement  for  1st  q'r.  of  1801,  as  above, 


3,976,239  84 

24,210  31 

37952,029  53 

4,177  72 


13,012,741  19 
59,617  66 


Reimbursement  of  the  year  1811,  estimated  at 

2.  Paid  in  for  Lands  and  purchased,  viz: 

For  lands,  unredeemed  amount,  as  stated  in  the  seve- 
ral estimates  marked  D,       -  -        61,282  10 

Deduct  on  account  of  the  nominal  am't 
instead  of  the  unredeemed  amount, 
having  been  inserted  in  those  esti- 
mates prior  to  30th  Sept.,  1805, 


12,953,123  53 
1,499,000  00 

14,452,123  53 


Purchased  in  1806,      - 

Exchanged  stock,  reimbursed  in  full, 


4,229  90 

57,062  20 1 

17,517  615 


74,569  81 
6,294,051  12 


Unredeemed  amount  on  1st  January,  1811,    -  -       18,566,096  08 

Deduct  reimbursement  of  1811,  estim'd  as  per  above,  at       1,499,000  00 


c.  3  per  cent,  stock  on  1st  January,  1801,  (including 
Higgins'  stock,  17. 18,  stated  subsequently  in  the  ac- 
counts) per  report  of  April,  1808, 

Do.     issued  subsequent  thereto, 

Total  outstanding  1st  April,  1801, 
Reimbursements : 

1.  Surrendered  in  exchange  for  converted  stock, 

2.  Paid  in  for  lands,  - 

Outstanding  on  1st  January,  1812,      - 

From  the  above  amount  of  reimbursements,  - 
Deduct  outstanding  converted  stock,  on  1st  Jan.  1812, 

Makes  the  reimbursement  on  3  per  cent,  stock  ^includ- 
ing cpnverteJ)  from  1  Apr.  1801,  to  1  Jan.  1812, 

Viz — Difference  between  3  per  ct.  surrendered  and  con- 
verted stock,  issued  under  the  act  of  Feb.  11th,  1807, 

Three  per  cent,  stock  paid  in  for  lands, 

Converted  do  do  do 

Do  do        to  be  reimbursed  on  the  31st 

December,  1811,     - 


2,861.309  15 
83,278  70 


2,944,587  85 
565,318  41 


1,001,458  45 

83,278  70 

80  00 

1,294,452  29 


41,895,310  01 


3,947,851  81 

37,947,458  20 

59,617  66 

37,887,840  54> 


20,820,744  46 


17,067,096  08 


13,093,902  21 
■    8,575  68 

19,102,477  89 


2,944,587  85 
16,15^890  U4 


2,379,269  44 


2,379,269  44 


466 


REPORTS  OF  THE 


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468  REPORTS  OF  THE 


[1812, 


REPORT  ON  THE  FINANCES. 

DECEMBER,  1812. 


In  obedience  to  the  directions  of  the  "  Act  supplementary  to  the  act,  en- 
titled "An  act  to  establish  the  Treasury  Department,"  the  Secretary  of  the 
Treasury  respectfully  submits  the  following  report  and  estimates. 

1.  To  the  end  of  the  year  1812. — The  actual  receipts  into  the  Treasury 
during  the  year  ending  on  the  30th  of  September,  1812,  have  consisted  of 
the  following  sums,  viz: 

Customs,  sales  of  lands,  arrears,  repayments,  and  all  other 
branches  of  revenue,  amounting  together,  as  will  appear 
more  in  detail  by  the  statement  (E.)  to  $10,934,946  90 

On  account  of  the  loan  of  eleven  millions  of  dollars  autho- 
rized by  the  act  of  March  14th,  1812,  -         -  5,847,212  50 


Total  amount  of  receipts,         -----.    16,782,159  40 
Making,  together  with  the  balance  in  the  Treasury  on  the 

1st  of  October,  1811,  and  amounting  to         -  3,947,818  36 


An  aggre  gate  of     -         -         -         -         *         -         -         -    20,729,977  76 

The  disbursements  during  the  same  year  have  been  as- follows,  viz: 

Civil  Department,  including  miscellaneous  expenses,    and 

those  incident  to  the  intercourse  with  foreign  nations,    -      1,823,069  35 

Army,  militia,  volunteers,  fortifications,  arms,  and  arsen- 
als, -         -         -         -  7,770,300  00  ^ 

Navy  Department,        -         -  3,107,50154  V-  11,108,776  54 

Indi.n  Department,       -         -  230,975  00) 

Interest  on  the  public  debt,  -  2,498,013  19)  _ 

On  account  of  the  principal  of  do'.     2,938,465  99  $  __?_  _\ 

Amounting   together,    as  will  appear   more  in   detail   by 

the  statement  (E. )  to 18,368,325  07 

And  leaving  in  the  Treasury,  on  the  30th  September,  1S12, 

a  balance  of  -  2,361,652  69 


820,729,977  76 


The  statement  (E  e.)  exhibits  in  detail  the  payments  made  by  the  Treasu- 
ry Department,  for  the  several  branches  of  the  Military  and  Naval  expendi- 
ture during  the  same  year,  (from  1st  October,  1811,  to  30th  September, 
1812,)  and  also  during  the  two  last  months,  (October  and  November,  1812.) 

The  receipts  for  the  last  quarter  of  the  year  1812,  on  account  of  both  reve- 
nue and  loans,  are  estimated  at  9,000,000  dollars;  and  the  expenditures  (in- 


1812.] 


SECRETARY  OF  THE  TREASURY.  459 


eluding  about  1,500,000  dollars   on  account  of  the  principal  of  the  public 
debt,  and  1,000,000  for  the  militia)  at  nearly  the  same  sum. 

The  sums  obtained  or  secured  on  loan  during  this  year,  amount,  so  far  as 
has  been  ascertained  at  the  Treasury,  to    -  a$l  3,100,200  00 

Of  which  there  was  received  prior  to  1st 

October,  1812,  as  above  stated,     -       -     5,847,212  50 
Received,  or  to  be  received,  prior  to  1st 

January,  1813,  -  6,202,987  50 

To  be  received  in  January  and  February, 

1813, 1,050,000  00 13,100,200  00 

It  will  also  appear  by  the  statement  (F.)  that  this  sum  was  obtained  on  the 
following  terms,  viz: 

For   six  per  cent,    stock,   irredeemable  till  1st  January, 
1825,  and  afterwards  redeemable  at  the  pleasure  of  the 

United  States, -         -         -      7,415,200  00 

On  temporary  loans,  at  the  rate  of  six  per  cent,  a  year, 
and  reimbursable,  as  follows,  viz: 

In  1813, 1,350,000  00 

In  1814, 750,000  00 

In  1817, 50,000  00 2,150,000  00 

For.  Treasury  Notes,  bearing  an  annual  interest  of  5|  per 

cent,  and  reimbursable  one  year  after  date,    -  3,535,000  00 


.3,100,200  00 


From  the  present  demand,  it  appears  probable,  that  the  residue  of  the 
Treasury  Notes  authorized  by  the  act  of  30th  June  last,  and  amounting  to 
$1,465,000,  will  be  disposed  of  prior  to  the  1st  of  March  Tiext. 

It  may  be  proper  also  to  state,  that,  notwithstanding  the  addition  thus  made 
to  the  public  debt,  and  although  a  considerable  portion  has  been  remitted 
from  England  and  brought  to  market  in  America,  the  public  stocks,  which 
had  at  first  experienced  a  slight  depression,  have  been  for  the  last  three 
months,  and  continue  to  be,  at  par. 

2.  Year  1813.— The  nett  revenue,  arising  from  duties  on  merchandise 
and  tonnage,  which  accrued  during  the  year  1810,  amounted  to  $12,513,490 

The  nett  revenue,  arising  from  the  same  sources,  which  accrued  during 
the  year  1811,  amounted,  as  will  appear  by  the  statements  (A.)  and  (B.)  to 
$7,902,560. 

The  same  revenue,  for  the  year  1812,  is  estimated  at  12.500,000  dollars; 
of  which  sum,  about  5,500,000  dollars  arise  from  duties  on  the  late  importa- 
tions from  Great  Britain. 

The  Custom-house  bonds  outstanding  on  the  first  day  of  January,  1313, 
and  falling  due  in  that  year,  are  estimated,  after  deducting  bad  "debts,  at 
11,250,000  dollars:  and  it  is  believed  that  the  probable  amount  of  receipts 
from  thatsource  into  the  Treasury,  during  the  year  181  3,  may  be  safely  esti- 
mated at  11,500,000  dollars. 

The  sales  of  public  lands  north  of  the  river  Ohio,  during  the  year  ending 
on  the  30th  September,  1811,  and  after  deducting  the  lands  which  have  re- 

a  The  amount  was  stated  in  the  President's  message,  at  the  commencement  of  the  session, 
at  eleven  millions  of  dollars.  The  other  two  millions  have  been  contracted  for,  subsequent  to 
its  date. 


470  REPORTS  OF  THE  [1812. 

verted  to  the  United  States,  have  amounted,  as  appears  by  the  statement  (C.) 
to  390,000  acres:  and  the  payments  by  the  purchasers  to  790,000  dollars. 
The  Indian  wars  may  affect  the  sales,  and  perhaps,  to  a  certain  extent,  the 
amount  of  payments.  It  is  however  believed,  that  that  branch  of  revenue 
may,  together  with  some  other  small  items,  be  estimated  for  the  ensuing 
3^ear  at  500,000  dollars:  making  the  whole  amount  of  probable  receipts  into 
the  Treasury  forthe  year  1813,  (exclusively  of  loans,)  12,000,000  dollars. 
The  expenditures  for  that  year  are  estimated,  as  follows,  viz: 

1.  Expenses  of  a  civil  nature,  both  foreign  and  do- 
mestic,   ------  $  1,500,000 

2.  Public  debt,  viz: 

Interest,  including  that  on  new  loans  of  the  years 

lS12andI813,  -  3,300,000 

Reimbursement  of  six  per  cent,  and  deferred  stocks, 
and  of  temporary  Joans  and  Treasury  Notes  falling 
due  in  1813,  and  estimated  amount  of  purchases 
of  stock,  -  -  -  -  -    5,200,000 

8,500,000 


3.   Military  Establishment: 
The  estimates  of  the   Secretary  of  War  are,  with 
respect  to  the  army,  predicated  on  the  employ- 
ment of  the  whole  force  authorized  by  law,  and 
amounting  to   36.700  men  of  every  description. 
Adding  to  this  the  expense  incident  to  the  service 
of  volunteers  and  militia,  and  also  the  increase  of 
pay  of  the  army,  the  appropriation  for  arming  the 
militia,  and  400,000  dollars  of  the  unexpended 
balance  for  fortifications,  the  whole  contemplated 
expense  may  be  estimated  as  follows: 
Army — pay,  subsistence,bounties,  clothing,  and  hos- 
pitals,     ------    9,350,000 

Ordnance  and  armories,       -  1,S50,000 

Quartermaster's  department,  and  contingencies,       -    2,500,000 
Fortifications,  -  -  -  -       900,000 

Arming  the  militia,  -  200,000 

Volunteers  and  militia  in  actual  service,        -  -    2,000,000 

Indian  Department,  -  200,000 


4.   Naval  Establishment: 

The  estimates  of  the  Secretary  of  the  Navy  are  predi- 
cated on  the  employment  of  the  following  force, 
viz: 

Commissioned  and  warrant  officers,  -  -  S71 

Petty  officers,  seamen,  and  boys,  viz: 

For  nine  frigates  and  nine  smaller  vessels,  -  3,620 

For  two  hundred  gun-boats  and  other  vessels,      -  7,000 

Marines,  including  officers,  -  1,869 

Total,  13,360 


17,000,00$ 


1812.] 


SECRETARY  OF  THE  TREASURY.  471 


And  the  expense  is  estimated  as  followeth,  viz: 

Pay,  provisions  and  medicine,  -  $3,290,000 

Ordinance  -  100,000 

Repairs,  contingencies,  and  navy  yards,  adding 
the  annual  appropriation  of  200,000  dollars  for 
timber,  -  -  -  -  -         1,125,000 

Marine  Corps,  -  -  -  -  410,000 


$  4,925,000 

Amounting  altogether  to      -  -  -  -  g 3 1,925,000 

The  receipts  on  account  of  the  revenue  having  been  esti- 
mated at  -  -  -  -  -  12,000,000 


Leaves  a  balance  to  be  provided  for  by  loans,  of         -  $  19,925,000 

Of  this  sum,  more  than  one  million  is  already  contracted  for,  and  there 
remains  on  hand  a  balance  of  about  a  million  and  a  half  in  Treasury  Notes, 
not  yet  disposed  of.  An  authority  to  issue  new  Notes  for  about  two  millions 
and  a  half  more,  being  the  amount  reimbursable  in  1813,  will  still  keep 
the  whole  amount  issued,  at  five  millions,  and  reduce  the  amount  of  the 
loan  to  about  fifteen  millions  of  dollars. 

In  order  to  facilitate  the  loan3  and  perhaps  to  improve  its  terms,  it  may, 
however,  be  eligible  to  leave  some  discretion  in  the  Executive,  as  to  the, 
respective  amounts  of  stock  and  notes  to  be  issued  ;  which  may  be  advan- 
tageously varied,  according  to  circumstances,  without  increasing  the  aggre- 
gate of  both. 

The  preceding  estimates  do  not  embrace  the  expense  incident  to  the  pro- 
posed increase  of  the  navy,  nor  any  other  expenditure,  not  yet  authorized 
by  law.  In  order  to  meet  any  new  expense  which  may  thus  be  authorized 
by  Congress,  it  will  therefore  be  necessary  to  increase  the  loan  to  a  corre- 
sponding amount. 

The  sums  received,  or  to  be  received,  on  loan,  during  the  calendar  year 
1812,  have  been  stated  at  -  $12,950,200 

The  payments  on  account  of  the  principal  of  the  debt,  dur- 
ing the  same  year,  though  not  yet  precisely  ascertained,  may 
be  estimated  (so  far  as  ascertained  on  the  1st  of  December  at 
the  Treasury)  at  _____  2,350,200 


Making  the  actual  increase  of  debt  during  that  year         -      $  10,600,000 

It  appears,  according  to  the  preceding  estimate,  that  the  whole  sum  to  be 
borrowed  during  the  year  1813,  will  amount  to  about  20  millions  of  dol- 
lars; and  that  the  payments  on  account  of  the  principal  of  the  public  debt 
will  exceed  five  millions;  making  the  actual  increase  of  debt,  during  that 
year,  -  -  -  -  -  -  $  15,000,000 


Of  the  revenue  which  will  accrue  during  the  year  1813,  and  on  which 
the  receipts  of  the  year  1814  will  principally  depend,  it  is  not  practicable 
at  this  moment  to  form  a  correct  estimate.  So  far  as  may  be  inferred  from 
the  experience  of  the  short  period  which  has  elapsed,  since  the  declaration 
of  war,  it  is  not  probable  that  the  revenue  derived  from  customs,  will  ex- 
ceed the  amount  of  $  5,000,000,  at  which  it  had  been  estimated  in  a  for 


47a  REPORTS  OF  THE  [1812. 

mer  communication.  The  duties  accrued,  or  which  will  accrue  during  the 
last  six  months  of  this  year,  after  deducting  drawbacks  and  expenses  of  col- 
lection, are  estimated  at  less  than  $  9,000,000;  which,  deducting  about 
5,500,000  dollars  on  account  of  duties  on  the  late  importations  from  Great 
Britain,  and  one  million  for  the  duties  on  importations  from  Calcutta  and 
China,  would  not  leave  more  than  2,500,000  dollars  for  the  ordinary  reve- 
nue on  those  branches  of  commerce  which  are  permitted  by  law,  and  from 
which  the  United  States  will  not  be  nearly  excluded  by  the  war. 
All  which  is  respectfully  submitted. 

ALBERT  GALLATIN. 

Treasury  Department,  December  1st,  1812. 


1812.] 


SECRETARY  OF  THE  TREASURY. 


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474  REPORTS  OF  THE  [1812. 

B. 

*#  STATEMENT  exhibiting  the  value  and  quantities,  respectively ,  of 
Merchandise  on  which  duties  actually  accrued  during  the  year  1811, 
{consisting  of  the  difference  between  articles  paying  duty,  imported, 
and  those  entitled  to  drawback,  re-exported,)  and,  also,  the  nett 
revenue  which  accrued,  during  that  year,  from  duties  on  Merchan- 
dise, Tonnage,  Passports,  and  Clearances. 

Goods  paying  duties  ad  valorem. 

$15,951,507,  at  12§  per  cent.  -      $1, 993,938  38 

2,524,551,  at  15  do  -  378,682   65 

131,114,  at  20  do         -  26,222  80 


1S,607,172 


a  Additional  duty  on  $18,604,453,  at  2\  per  ct.    46  5, 1 1 1   32 

2,863,955  15 
b  Spirits,  3,447,873  galls,  at  27.6  cts.  av.  950,603  86 
c   Sugar,     55,332,314  lbs.     at    2.5      do  1,391,731  56 

d  Wines,      1,614,654  galls,  at  31.3      do  505,11135 

e  Teas,         2,557,329  lbs.     at  21.1       do  540,594  24 

Coffee,    17,468,398  lbs.     at    5     cts.  873,419  90 

Molasses,  8,500,019  galls,  at     5     cts.  425,000  95 

/  All  other  articles,     -  -  -  543,292  02 


From  which  deduct  bounties  784  13 

Duties  refunded,  after  deduct- 
ing; therefrom  duties  collect- 
ed 

ed  on  merchandise,  the  par- 
ticulars of  which  could  not  be 
ascertained,  and  difference  in 
calculation  -  -         42,468  59 


8,093,709  03 


43,252  72 


8,050,456  31 

3|  per  cent,  retained  on  drawback                     -             -  80,952  67 
Extra  duty  of  10  per  cent,  on  merchandise 

imported  in  foreign  vessels             -             -             -  :  48,947  50 

Nett  amount  of  duties  on  merchandise                -  8,180,356  48 
Duties  on  tonnage        -                                              105,890  43 
Light  money                -             -                           -      18,472  87 

■  124,363  30 

Duties  on  passports  and  clearances                     -             -  19,737  70 

Gross  amount  of  revenue,  as  per  statement  A,  8,324,457  48 

Deduct  expenses  on  collection              -             -             -  440,  .';24  46 

Nett  revenue,  7,883,533  02 

Treasury  Department,  Register's  Office,  Nov.  18th,  1812. 

JOSEPH  NOURSE,  Register, 


1812.] 


SECRETARY  OF  THE  TREASURY. 


475 


Explanatory  Statements  and  Notes. 


Additional  duty  of  2^  per  cent.  - 

3^  per  cent,  retained  on  drawbacks       » 
Extra  duty  of  10  per  cent,  on  merchandise  imported  in  foreign  vessels 


$465,111  32 


Dollars, 


b     Spirits — 

Grain            -             1st  proof, 

37",  63  8  g 

allons, 

at 

28 

cent 

Deduct  excess  of  exportation 

beyond  importation,      3d  proof, 

1,180 

36^458 

do 

at 

31 

do 

Other  materials,  1st  &  2d  do 

1,286,132 

do 

25 

do 

3d       do 

1,524,309 

do 

28, 

do 

4th     do 

599,977 

do 

32 

do 

5th     do 

997 

do 

38 

do 

3,447,873 


Dollars, 


Sugar- 


Brown, 

White, 


53,647,571  pounds,  at  2£  cents 
1,684,743         do  3       do 


55,332,314 


Dollars, 


Wines — 

Madeira,  1st  quality, 

2d       do 
Sherry  and  St.  Lucar, 
Oporto  and  Lisbon, 
Burgundy  and  Champaign, 
Teneriffe,  Fayal,  and  Malaga, 
Other,  jgi  bottles, 
Do    in  casks, 


e i   Teas — 

Bohea, 

Souchong,      - 

Hyson,  -  262,921 

Deduct  excess  of  exporta- 
tion beyond  importation,         *  379 

Other  green, 

Extra  duty  on  teas  imported  from 
other  places  than  India^ 


218,018  gallons,  at  58  cents 


48,673 

do 

50 

do 

4,515 

do 

40 

do 

111,653 

do 

30 

do 

835 

do 

45 

do 

653,512 

do 

28 

do 

23,753 

do 

35 

do 

553,695 

do 

23 

do 

1,614,654 


Dollars, 


54,313  pounds,  at  12  cents 
456,154'        do  18      do 


262,542 
1,784,320 


do 
do 


32 
20 


do 
do 


2,557,329  pounds,  Dollars, 


2,857 

y4 

1,752 

66 

469,721 

92 

10,538 

64 

365 

80 

10,172 

84 

321,533 

00 

426,526 

52 

191,992 

64 

378 

68 

950,603 

86 

1,341,189 

27 

50,542 

29 

1,391,731 

55 

126.450  44 

24,336 

50 

1,806 

00 

33,495 

90 

375 

75 

182,983 

36 

8,313 

55 

127,349 

85 

505,111 

35 

6,517 

56 

82,107 

72 

84,013 

44 

356,864  00 

11,091 

52 

540,594 

24 

Hyson  tea  imported  from  other  places  than  India— rate  of  duty  50  cents. 


61 


476  REPORTS  OF  THE  [1812- 

Explanatory  Statements  and  Notes — Continued. 


Quantity. 

Rate  of 

duty. 

Excess  of 
duties  over 

Excess  of 

t 

drawback 

f    All  other  articles. 

Excess  of 

Excess  of 

drawback . 

over    du- 

importation 
over  ex- 

exporta- 
tion over 

Cents. 

ties. 

portation. 

importa- 

• 

tion. 

Domestic  spirits,  1st  proof 

gallons 

337 

7 

23  59 

Do           3d     do 

do 

41 

. 

15 

6  15 

Beer,  ale,  and  porter             - 

do 

42,103 

_ 

8 

3,368  24 

Cocoa             ... 

pounds 

678,895 

. 

2 

13,577  90 

Chocolate      - 

do 

1,844 

. 

3 

55  32 

Sugar,  candy 

.do 

1,700 

. 

U* 

195  50 

loaf  "- 

do 

94 

. 

9 

8  46 

other,  refined, 

do 

1,099 

6* 

71  43 

Almonds       ... 

do 

240,971 

- 

2 

4,819  42 

C  u  "rants        ... 

do 

104,330 

. 

2 

2,086  60 

Prunes  and  plums 

do 

43,237 

. 

2 

864  74 

Figs 

do 

268,101 

. 

2 

5,162  02 

Raisins,  jar 

do 

809,460 

. 

2 

16,189  20 

other         '     - 

do 

765,918 

•_ 

H 

ll,-i88  76 

Candles,  taliow 

do 

31,631 

. 

2 

632  62 

wax,  or  spermaceti 

do 

8,165 

. 

6 

489  90 

Cheese           - 

do 

7,512 

- 

7 

525  84 

Soap              ... 

do 

322,272 

- 

2 

6,445  44 

Tallow           - 

do 

1,058,716 

- 

1| 

15,880  74 

Spices — Mace 

do 

- 

1,991 

125 

- 

2,488  75 

Nutmegs 

do 

55,942 

- 

50 

27,971  00 

Cinnamon    - 

do 

12  136 

. 

20 

2,427  20 

Cloves 

do 

37,056 

- 

20 

7,411  20 

Pepper 

do 

- 

458,480 

6 

- 

27,508  80 

Pimento 

do 

358,788 

. 

4 

14,351  52 

Cassia 

do 

153, S88 

- 

4 

6,155  52 

Tobacco        - 

do 

17,404 

. 

6 

1,044  24 

Snuff 

do 

804 

- 

10 

80  40 

Indigo            - 

do 

342,176 

. 

25 

85,544  00 

Cotton           ... 

do 

.186,515 

- 

3 

5,595  45 

Powder,  gun 

do 

3,944 

- 

4 

157  76 

Starch           -             -             - 

do 

4,483 

- 

3 

134  49 

Glue 

do 

14,334 

- 

4 

573  36 

Pewter  plates  and  dishes 

do 

3,880 

. 

4 

155  20 

Iron,  anchors,  and  sheet 

do 

286,286 

H 

4,294  29 

slit  and  hoop 

do 

175,856 

. 

l 

1,758  56 

Na;.ls              - 

do 

212,389 

- 

2 

4,247  78 

Spikes           ... 

do 

48,808 

- 

1 

488  08 

Quicksilver 

do 

14,316 

. 

6 

858  96 

Ochre,  in  oil 

do 

700 

. 

ii 

10  50 

dry 

do 

136,247 

- 

l 

1,362  47 

Spanish  brown 

do 

7,802 

- 

l 

78  02 

White  and  red  lead 

do 

863,207 

- 

2 

17,264  14 

Lead 

do 

1,336,196 

-    • 

1 

13,361  96 

Cordage,  tarred 

do 

825,754 

- 

2 

16,515  08 

untarred     - 

d<> 

111,545 

- 

2£ 

2,788  62 

Cables           ".'."'" 

do 

84,365 

- 

2 

1,687  30 

Steel              ... 

cwt. 

3,411 

. 

100 

3,411  00 

Hemp            .             -             - 

do 

218,705 

-  - 

100 

218,705  00 

Untarred  yam 

do 

o 

- 

225 

4  50 

Twine           - 

do 

1,204 

.  - 

400 

4,816  00 

Rlauber  salts 

do 

- 

1           32 

200 

- 

64  00 

1812.]  SECRETARY  OF  THE  TREASURY.  477 

Explanatory  Statements  and  Notes — Continued. 


Quantity. 

\ 

Rate  of 

Excess  of 

Excess  of 

duty. 

duties  over 

drawback 

/    All  other  articles — Continued. 

Excess  of 

Excess  of 

drawback. 

over    du- 

importation 
over    ex- 

exporta- 
tion over 

Cents. 

ties. 

portation. 

importa- 
tion. 

Coal 

bushels 

96,512 

5 

4,825  60 

Malt 

do 

40 

'- 

10 

4  00 

Fish,  dried    - 

quintals 

1,175 

- 

50 

587  50 

pickled  salmon 

barrels 

296 

-   -  ' 

100 

296  00 

mackerel 

do 

3,155 

■ 

60 

1,893  00 

all  other 

do 

274 

- 

40 

109  60 

Glass,  black  quart  bottles     - 

gross 

3,071 

- 

60 

1,8*2  60 

window,  not  above  8  by  10 

100  sq.ft. 

3,867 

- 

160 

6,187  20 

do        do            10      12 

do 

3,008 

- 

175 

5,264  00 

do        all  above  10      12 

do 

649 

- 

225 

1,460  25 

Segars           ... 

M. 

11,833 

- 

2'0 

23,666  00 

Boots 

pairs 

342 

- 

75 

256  50 

Shoes,  silk 

do 

3,880 

. 

25 

970  00 

kid  and  morocco 

do 

5,117 

- 

15 

767  55 

other 

do 

203 

. 

10 

20  30 

Cards,  wool  and  cotton 

dozens 

44 

. 

50 

22  00 

playing-- 

packs 

144 

•  25 

36  00 

573,353  57 

30,061  55 

30,061  55 

543,292  02 

Treasury  Department, 

Register's  Office,  November  18th,  1812. 

JOSEPH  NOURSE,  Register, 


REPORTS  OF  THE 


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[1812. 


STATEMENT  of  the  amount  of  Moneys  obtained  on  loan,  by  the 
United  States,  during  the  year  1812,  so  far  as  ascertained  at  the  Trea- 
sury, on  the  1st  December,  1812. 


For  stock 

By  special 

For  Trea- 

Places. 

bearing    an 
interest  of  6 
per  cent. 

contract,  at 
6  per  cent, 
interest. 

sury  Notes. 

Total. 

Portsmouth,  New  Hampshire 

17,600 

17,600 

Portland,  Maine     •  -»-           - 

- 

50,000 

- 

50,000 

Boston  and  Salem,  Massachusetts  - 

744,100 

1,000,000 

400,000 

2,144,100 

Providence,  Rhode  Island  - 

94,200 

. 

. 

94,200 

Hartford,  Connecticut         ... 

6,200 

. 

. 

6,200 

New  York                .... 

1,733,000 

- 

1,600,000 

3,333,000 

Philadelphia            .... 

2,502,300 

400,000 

1,295,000 

4,197,300 

Baltimore    - 

1,117,700 

200,000 

90,000 

1,407,700 

Washington              .... 

498,600 

100,000 

150,000 

748,600 

Richmond,  Virginia             ... 

326,100 

250,000 

. 

576,100 

Charleston,  South  Carolina 

375,400 

150,000 

- 

525,400 

7,415,200 

2,150,000 

3,535,000 

13,100,200 

Of  the  above  sum,  there  was  loaned,  by  individuals, 

by  banks, 


$  3,970,200 
9,130,000 

$13,100,200 


In  manner  following,  viz : 


BY  INDIVIDUALS. 


Places. 

For  6  per  cent, 
stock . 

For  Treasury 
Notes. 

Total. 

Portsmouth              .... 
Boston  and  Salem   .... 
Providence               .... 
Hartford      ..... 

New  York  - 

Philadelphia            -                          - 

Baltimore    - 

Washington             .... 

Richmond  - 

Charleston               - 

17,600 
724,100 

14,200 

6,200 

473,000 

1,457,300 

547,700 

73,600 
126,100 

75,400 

265,000 
90,000 

17,600 
724,100 

14,200 

6,200 

473,000 

1,722,300 

637,700 

73,600 
126,100 

75,400 

3,515,200 

355,000 

3,870,200 

SECRETARY  OF  THE  TREASURY: 

STATEMENT  F— Continued. 

BY  BANKS. 


487 


By  special  contract,  reim- 

For Trea- 

Places where 

Names  of  Banks. 

For  6  per 
ct.  stock. 

bursable  in  the  years 

sury 

Notes. 

Total. 

subscribed. 

1813. 

1814. 

1817. 

Portland 

Cumberland 

. 

50,000 

50,000 

Salem 

Merchants3    - 

20,000 

- 

- 

- 

- 

20,000 

Boston 

State 

- 

500,000 

500,000 

- 

400,000 

1,400,000 

Providence 

Bristol 

50,000 

- 

- 

- 

- 

.50,000 

Roger  Williams 

20,000 

- 

- 

.- 

- 

20,000 

Newport 

10,000 

- 

- 

.r 

- 

10,000 

New  York 

State,  (Albany) 

60,000 

- 

- 

- 

- 

60,000 

Manhattan     - 

600,000 

- 

- 

-       . 

1,000,000 

1,600,000 

Mechanics'    - 

600,000 

- 

- 

600,000 

1,200,000 

Philadelphia 

Pennsylvania 

500,000 

- 

- 

800,000 

1,300,000 

Farmers  &  Mechanics' 

300,000 

- 

- 

- 

200,000 

500,000 

Philadelphia 

100,000 

400,000 

- 

- 

- 

500,000 

North  America 

100,000 

- 

- 

- 

100,000 

Trenton 

20,000 

- 

- 

- 

30,000 

50,000 

Newbern 

25,000 

- 

- 

- 

- 

25,000 

Baltimore 

Baltimore 

50,000 

100,000 

100,000 

- 

- 

250,000 

Union,  of  Maryland  - 

250,000 

- 

- 

- 

- 

250,000 

Mechanics'    - 

50,000 

- 

- 

- 

50,000 

Marine 

50,000 

- 

- 

- 

- 

50,000 

Commer'l  &  Farmers' 

120,000 

- 

- 

- 

- 

120,000 

Farmers  &  Merchants' 

20,000 

- 

- 

- 

- 

20,000 

Franklin 

20,000 

- 

- 

- 

- 

20,000 

Maryland 

10,000 

- 

- 

- 

- 

10,000 

Washington 

Columbia 

200,000 

- 

- 

" 

- 

200,000 

Washington 

50,000 

- 

- 

- 

■  - 

50,000 

Union,  of  Georgetown 

75,000 

- 

-. 

- 

50,000 

125,000 

Farmers'  of  Alexandria 

- 

100,000 

- 

- 

100,000 

200,000 

Alexandria    - 

100,000 

- 

- 

- 

- 

100,000 

Richmond 

Virginia 

200,000 

250,000 

- 

- 

- 

450,000 

Charleston 

State              -     . 

100,000 

- 

150,000 

- 

- 

250,000 

Planters  &  Mechanics' 

200,000 

" 

■ 

200,000 

3,900,000 

1,350,000 

750,000 

50,00C 

3,180,000 

9,230,000 

REPORTS  OF  THE 


488  REPORTS  UF  THK  T1S13. 


REPORT  ON  THE  FINANCES. 

JUSfS,  1813. 


In  obedience  to  the  act,  supplementary  to  the  act,  entitled  "  An  act  to  es- 
tablish tbe  Treasury  Department,"  the    Acting  Secretary  of  the  Treasury 
respectfully  submits  the  following  report. 
The  receipts~into  the  Treasury,  from  the  1st  of  October, 

1S12,  to  the  31st  March,  lcl3,  have  amounted  to  $15,412,416  25 

The  balance  in  the  Treasury,  on  the  30th  September,  1812, 

was         -----  -  2,362,652  69 


Making  together,  -  $17,775,06S  94 

The  expenditures,  from  the  1st  October,  1S12,  to  the  31st 

March,  1813,  have  amounted  to  -  -  $15,919,  334  41 

Leaving  a  balance  in  the  Treasury,  on  the  1st  of  April, 

1813,  of  -  1,855,734  53 


17,775,068  94 


The  enclosed  Statement  (A.)  shows,  in  detail,  the  several  sources  from 
which  the  receipts  were  derived,  and  the  branches  of  expenditure  to  which 
the  disbursements  from  the  Treasury  were  applied. 

Pursuant  to  the  act  of  Sth  February  last,  subscriptions  for  a  loan  of  sixteen 
millions  of  dollars,  were  opened  on  the  12th,  and  again  on  the  25th  of  March 
last.  But,  although  a  thirteen  years'  annuity  of  one  per  cent,  was  offered, 
in  addition  to  a  six  per  cent,  stock  at  par,  for  the  money  which  might  be 
subscribed,  it  being  apparent,  from  the  result  of  the  first  subscription,  that 
the  whole  amount  could  not  be  obtained  on  those  terms,  proposals  in  writing 
were  invited.  Offers,  exceeding  by  about  a  million  of  dollars  the  amount 
wanted,  were  received,  sorne  demanding  a  thirteen  years'  annuity  of  one 
and  a  half  per  cent,  in  addition  to  six  per  cent,  stock  at  par,  but  most  of 
them  requiring  a  six  per  cent,  stock,  at  the  rate  of  88  per  cent.  On  these 
terms,  leaving  to  the  subscribers  the  option,  the  loan  was  effected. 

In  conformity  with  the  public  notification,  the  same  terms  were  extended 
to  those  persons  who  had  subscribed  on  the  first  opening  of  the  subscription, 
and  they  have  the  same  option;  which,  if  the  stock  at  the  rate  of  88  per 
cent,  be  taken,  is  equivalent,  precisely,  to  a  premium  of  thirteen  dollars  six- 
ty-three cents  and  seven-elevenths  of  a  cent,  for  each  hundred  dollars  loaned 
to  the  government. 

Theenclosed  papers,  under  the  letter  B,  are  copies  of  the  several  public 
notices  given  on  the  subject,  and  a  statement  of  the  moneys  respectively 
obtained  by  open  subscriptions,  and  by  written  proposals,  and  showing  also, 
the  sums  obtained  and  payable  in  each  place  where  subscriptions  were  opened. 

Of  that  sum  of  sixteen  millions  of  dollars,  thus  obtained  on  loan,  there 
was  paid  into  the  Treasury,  prior  to   the    1st  of  April,  1813,  the  sum   of 


1813.]  SECRETARY  OF  THE  TREASURY.  439 

1,086,737  50,  which  makes  a  part  of  the  moneys  received  previous^  to  that 
day,  as  stated  in  the  statement  A. 

The  resources  for  the  residue  of  the  year  1813,  consist  of  the  following 
items,  viz: 

1.  The  remainder  of  the  loan  above-mentioned,       -  $14,913,262  50 

2.  The  sums  payable  on  account  of  customs,  and  of  the 

sales  of  public  lands,  estimated  at  9,320,000  00 

3.  The  five  millions  of  dollars  in  Treasury  Notes,  authoriz- 
ed by  the  act  of  February  25th,  1813,     -  5,000,000  00 


Say  $29,230,000  00 

The  expenses  for  the  last  nine  months  of  the  present  year,  are  calculated 
as  followeth,  viz: 

1.  Civil  list,  and  all  expenses  of  a  civil  nature,  both  for- 
eign and  domestic,  -  -  -  -  -     $  900,000  00 

2.  Payments  on  account  of  the  principal  and  interest  of  the 

public  debt,  as  per  estimate  C,  herewith  -  10,510,000  00 

3.  Expenses  on  account  of  the  War  and  Navy  Departments,     17,820,000  00 


•§29,230,000  00 


Of  the  sum  of  $1,855,734  53,  remaining  in  the  Treasury  on  the  1st  of 
April  last,  a  small  part  may  be  considered  as  applicable  to  such  extraordinary 
expenses,  already  authorized,  as  may  arise  during  the  remainder  of  the  year; 
and  for  the  same  object,  the  sum  of  1 ,000,000  of  dollars,  authorized  by  an 
act  of  the  State  of  Pennsylvania,  to  be  loaned  to  the  United  States,  but 
which  was  not  offered  in  time  to  be  accepted  as  a  part  of  the  loan  of  sixteen 
millions,  may  be  considered  as  a  resource. 

In  this  estimate,  the  whole  sum  of  five  millions  of  dollars,  authorized  to 
be  issued  in  Treasury  Notes,  is  taken  as  a  part  of  the  resources  of  the  present 
year.  But,  as  it  is  not  deemed  eligible  to  increase  the  amount  of  Treasury 
Notes  in  circulation,  and  as  three  millions  only,  of  those  authorized  by  the 
act  of  1812,  were  issued  in  that  year,  and  are  reimbursable  in  the  course  of 
the  present  year,  it  is  respectfully  suggested,  that  in  lieu  of  issuing  two  mil- 
lions of  the  five  millions  authorized  by  the  act  of  February,  1813,  Congress 
should  authorize  an  additional  loan  for  the  same  amount;  it  being  made  a 
condition  of  such  loan,  that  its  terms  should  not  be  higher  than  those  of  the 
loan  of  sixteen  millions,  already  effected. 

The  provision  already  considered,  is  for  the  service  of  the  present  year 
only;  that  which  will  be  necessary  for  the  year  1814,  requires  an  early  at- 
tention. It  is  difficult  to  estimate,  with  accuracy,  the  sum  which  will  be 
received  into  the  Treasury  from  the  revenue  as  now  established. 

During  a  state  of  war,  the  customs,  at  the  present  rate  of  duties,  have  been 
heretofore  estimated  to  produce  five  millions  of  dollars.  The  additional 
tonnage  duty,  imposed  upon  foreign  vessels,  by  the  act  of  1st  July  1812, 
producing  about  200,000  dollars  a  year,  is  not  included  in  that  sum. 

It  is  believed,  that  during  the  year  1814,  a  greater  sum  than  five  millions 
two  hundred  thousand  dollars,  ought  not  to  be  relied  upon,  as  receivable 
into  the  Treasury,  from  custom  house  duties.  The  sum  arising  from  sales  of 
public  lands,  may  be  estimated  at  six  hundred  thousand  dollars,  making 
together  5,800,000  dollars.  The  interest  alone,  on  the  public  funded  debt, 
on  temporary  loans,  and  on  the  Treasury  Notes,  which  will  become  payable 


490  REPORTS  OF  THE  [1813. 

in  that  year,  will  amount  to  four  millions  four  hundred  thousand  dollars. 
The  other  engagements,  on  account  of  the  principal  of  the  funded  debt,  of 
temporary  loans,  and  of  Treasury  Notes,  which  will  become  reimbursable  in 
that  year,  amount  to  7,150,000  dollars;  exceeding,  together,  by  more  than 
five  millions  seven  hundred  thousand  dollars,  the  estimated  amount  of  the 
receipts  into  the  Treasury,  derived  from  the  revenue  as  now  established. 

This  view  of  the  subject  is  sufficient  to  evince  the  necessity  of  a  speedy 
and  effectual  provision  for  the  service  of  that  and  the  ensuing  years.  The 
mode  and  the  extent  to  which  this  provision  should  be  carried,  have  been 
heretofore  suggested,  from  this  Department  to  Congress,  and  have  received 
the  consideration  of  that  body. 

The  expenses  of  the  Peace  Establishment  of  the  United  States,  and  the 
interest  on  the  public  debt,  including  that  on  the  loans  made  for  the  prose- 
cution of  the  war,  are  believed  to  be  the  least  sums  that  ought,  under  any 
circumstances,  to  be  raised  within  each  year."  These,  if  the  expenses  of  the 
Peace  Establishment  are  taken  at  the  sum  necessary  for  the  ordinary  expen- 
diture of  the  United  States,  previously  to  the  additional  armaments  made 
in  the  year  1812,  with  a  view  to  an  approaching  state  of  war,  and  including 
the  interest  on  the  loans  of  the  year  1812  and  1813;  and  also  of  that  which 
will  probably  be  necessary  in  the  year  1814,  will  amount,  during  that  year, 
to  eleven  millions  four  hundred  thousand  dollars,  viz: 

The   expense  of   the   Peace  Establishment,  exclusive  of  the  additional 
force  authorized  by  the  acts  passed  during  the  j^ear  1812,  may  be  estimated 
at  ------  -  $7,000,000 

The  interest  on  the  public  debt,  during  the  year  1814,  will  be 

as  follows: 
On  old  funded  debt  -  -  -  #2,100,000 

On  6  percent,  stock  of  1812,  including  temporary 

loans,  received  in  part  of  the  loan  of    eleven 

millions,  which  will  remain  unpaid  in  1814,  500,000 

On  6  percent,  stock  of  1813,  -  -  1,090,000 

On  Treasury  Notes,  which  will  be  reimbursable  in 

1S14,  say  on  5,000,000  dollars,  at  5-|  per  cent         270,000 


3,960,000 

On  the  loan  for  the  year   1814,  interest   payable 

within  that  year  -  440,000 


SI  1,400,000 


The  revenue,  as  now  established,  being  estimated  to  produce      $5,SOO,000 
Would  leave  to  be  raised  -  5,600,000 


To  cover  the  above  sum  of  -  $11,400,000 


The  internal  taxes  heretofore   proposed,  were   estimated   to 

produce  -  -  -  ".'.".  $5,000,000 

And  the  duty  of  20  cents  a  bushel  on  salt  imported,  which, 
though  estimated  heretofore  at  only  400,000  dollars  a  year, 
during  a  state  of  war,  yet,  as  the  consumption  considerably 
exceeds  2,000,000  of  bushels,  may  be  estimated  to  produce  600,000 


Making  the  sum  wanted   -----  g5,600,000 


1813.]  SECRETARY  OF  THE  TREASURY.  491 

Although  the  taxes,  if  early  laid,  may  be  brought  into  operation  in  the 
commencement  of  the  year  1814,  yet  as  they  cannot  be  expected  to  have 
their  full  effect  during  that  year,  some  auxiliary  lesource  will  be  required. 
This  may  be  found  in  the  sum  of  1,500,000  dollars,  which  is  the  excess  of 
the  Sinking  Fund  for  the  present  year,  over  the  demands  on  that  fund,  ac- 
cording to  the  existing  engagements  of  the  United  States.  This  sum  of 
1,500,000  dollars,  may  be  carried  to  the  Sinking  Fund,  for  the  year  1814, 
and  will  be  wanted,  in  addition  to  the  annual  appropriation  of  8,000,000  of 
dollars,  to  meet  the  engagements  on  account  of  the  public  debt,  which  must 
be  fulfilled  during  that  year. 

As  reliance  must  be  had  upon  a  loan,  for  the  war  expenses  of  the  year  1S14, 
the  laying  of  the  internal  taxes  may  be  considered,  with  a  view  to  that  ob- 
ject, as  essentially  necessary:  in  the  first  place,  to  facilitate  the  obtaining  of 
the  loan;  and  secondly,  for  procuring  it  on  favorable  terms. 

It  is  ascertained  that  the  terms  of  the  loan,  for  the  present  year,  would 
have  been  more  favorable,  if  the  taxes  had  been  previously  laid;  and  it  is 
obvious  enough,  that  by  affording  a  security  for  the  regular  payment  of  the 
interest,  and  the  eventual  reimbursement  of  the  principal,  more  stable,  and 
less  liable  to  be  weakened  or  cut  off  by  the  natural  effects  of  war,  upon  ex- 
ternal commerce,  than  a  revenue,  depending  as  that  of  the  United  States  now 
does,  almost  wholly  upon  such  external  commerce.  Capitalists  will  advance 
with  the  greater  readiness,  and  at  a  lower  rate  of  interest,  the  funds  necessary 
for  the  prosecution  of  1  he  war;  public  confidence  will  be  ensured,  and  the 
means  afforded,  of  preserving  the  public  credit  unimpaired:  a  measure  of 
the  utmost  importance,  in  a  country  like  ours,  where,  from  the  lightness  of 
the  demands  made  upon  the  people,  during  the  continuance  of  peace,  the 
extraordinary  expenses  of  a  state  of  war  can  be  supplied  only  by  a  resort 
to  that  credit. 

The  resources  of  the  country  are  ample,  and  if  the  means  now  proposed, 
and  those  heretofore  recommended  from  this  Department,  are  adopted,  it  is 
believed  they  may  be  fairly  and  fully  brought  into  action. 

All  which  is  respectfully  submitted. 

W.  JONES,  Acting  Secretary 

of  the   Treasury, 

TreAvSurt  Department,  June  2d,  1813. 


63 


49g  REPORTS  OF  THE  [1813' 

A. 

Receipts  and  expenditures  at  the  Treasury  of  the  United  States,  from 
the  1st  of  October,   1812,  to  the  3lst  of  March,  1813. 

Cash  in  the  Treasury,  subject  to  warrant,      .  $2,362,652  69 

Received  for  Customs,        -         -         -         $4,720,001  44 

arrears  of  Direct  Tax,     -  105  52 

sales  of  Public  Lands,     -  450,596  95 

cents  coined  at  the  Mint,  2,780  00 

fees  on  Letters  Patent,    -  3,060  00 

postage  of  Letters,          -  39  70 
Seamen;s  stores  sold,  and  fund 

-  for  relief  of  Seamen,  284  45 

fines,  penalties  and  forfeitures,  1,984  96 

repayments  of  moneys  advanced,  20,892  51 
prize  money  for  Navy  Pension 

Fund,         ....  3,645  72 

interest  on  Treasury  Notes,  300  00 


5,203,691   25 
Treasury  Notes,  (actof  1812,)  4,752,500  00 
do.  (act  of  1813,)        32,000  00 


4,784,500  00 
Loan  of  11  millions,  (1812,)  4,337,4S7  50 
Loan  of  16  millions,  (1813,)   1,086,737  50 


10,208,725  00 


Expenditures,  viz.: — 

On  account  of  the  Civil  Department,  440,473  76 

Miscellaneous  expenses,  36S,518  64 

Diplomatic         do.  48,087  37 

Military  Department,  9,039,275  49 

Naval              do.  2,690,752  20 

Public  Debt,  3,332,226  95 


15,412,416  25 
17,775,068  94 


15,919,334  41 


Cash  in  the  Treasury,  subject  to  warrant,  March  31,  1813,   $1,855,734  55 


B, 

The  United  States'  loan  of  16,000,000  dollars,  has  been  taken  up  in  the 
following  manner  and  proportions: 

First  subscription  on  the  12th  and  13th  March,  1813,  $3,956,400  00 

Second  subscription,  25th  to  31st  March,  1813,  1,881,800  00 

Proposals  made  on  the  5th  of  April,  of  which  only 

$10, 16 1,800  could  be  received,             -  11,106,000  00 


1813.] 


SECRETARY  OF  THE  TREASURY. 


498 


To  which  may  be  added  the  amount  intended  to  be 
loaned  by  the  State  of  Pennsylvania,  the  proposals 
for  which,  not  being  received  in  time,  could  not  be 
admitted,         ___----- 


1,000,000  00 


$17,944,200  00 

Being  1,944,200  dollars  more  than  the  sum 

of  16,000,000  authorized  by 

law,  and  actually 

borrowed. 

That  sum  of  $16,000,000  has  been  subscribed, 

and 

is  payable  at  the  fol- 

lowing  places: 

New  Hampshire, 

- 

Portsmouth, 

- 

.      $  40,000 

Massachusetts, 

- 

Portland, 

- 

120,000 

Salem, 

- 

183,600 

Boston, 

- 

75,300 

Rhode  Island, 

- 

Providence, 

- 

67,800 

New  York, 

- 

New  York, 

- 

5,437,100 

Albany, 

- 

283,500 

Pennsylvania, 

- 

Philadelphia, 

- 

6,858,400 

Maryland, 

- 

Baltimore, 

- 

1,950,800 

Columbia,     - 

- 

Washington, 

- 

442,500 

Virginia, 

- 

Richmond, 

- 

49,000 

Petersburg, 

- 

35,000 

Norfolk, 

- 

103,000 

South  Carolina, 

Charleston, 

354,000 

16,000,000 

B.  1. 

Whereas,  by  an  act  of  Congress  passed  on  the  eighth  day  of  February, 
one  thousand  eight  hundred  and  thirteen,  the  President  of  the  United 
States  is  authorized  to  borrow,  on  the  credit  of  the  United  States,  a  sum 
not  exceeding  sixteen  millions  of  dollars,  so  however  that  no  engagement 
or  contract  shall  be  entered  into,  which  shall  preclude  the  United  States 
from  reimbursing  any  sum  or  sums  thus  borrowed,  at  any  time  after  the  ex- 
piration of  twelve  years  from  the  first  day  of  January,  one  thousand  eight 
hundred  and  fourteen.  And  whereas,  by  the  said  act,  so  much  of  the  funds 
constituting  the  annual  appropriation  of  eight  millions  of  dollars,  for  the 
payment  of  the  principal  and  interest  of  the  public  debt  of  the  United 
States,  as  may  be  wanted  for  that  purpose,  after  satisfying  the  sums  neces- 
sary for  the  payment  of  the  interest,  and  such  part  of  the  principal  of  said 
debt  as  the  United  States  are  now  pledged  annually  to  pay  and  reimburse, 
is  pledged  and  appropriated  for  the  payment  of  the  interest,  and  for  the 
reimbursement  of  the  principal  of  the  stock  now  to  be  created,  and  the 
faith  of  the  United  States  is  pledged  to  establish  sufficient  revenues  for 
making  up  any  deficiency  that  may  hereafter  take  place  in  the  funds  now 
appropriated  for  paying  the  interest  and  principal  as  aforesaid.  And  where- 
as the  President  of  the  United  States  did,  by  an  act  or  commission  under 
his  hand,   dated  the  seventeenth  day  of  February,  one  thousand  eight  hun- 


494  REPORTS  OF  THE  [1813. 

tired  and  thirteen,  authorize  and  empower  the  Secretary  of  the  Treasury  to 
borrow,  on  behalf  of  the  United  States,  a  sum  not  exceeding  in  the  whole 
sixteen  millions  of  dollars,  and  to  make  the  necessary  contracts  for  the 
same,  pursuant  to  the  act  of  Congress  above  recited: 

Now,  therefore,  the  undersigned,  Secretary  of  the  Treasury,  in  pursuance 
of  the  act  of  Congress,  and  the  authority  from  the  President  of  the  United 
States  above-mentioned,  doth  hereby,  on  behalf  of  the  United  States,  con- 
tract and  engage  in  manner  following,  to  wit: 

1.  Books  for  receiving  subscriptions  to  a  loan  of  sixteen  millions  of  dol- 
lars, for  the  use  of  the  United  States,  shall  be  opened  on  the  twelfth  day  of 
March  next, 

At  Portsmouth,  N.  H.  At  the  New  Hampshire  Union  Bank. 

At  SalemTIVlass.  At  the  Merchants'  Bank. 

At  Boston,  Mass.  At  the  State  Bank. 

At  Providence,  R.  I.  At  the  Roger  Williams*  Bank. 

At  the  City  of  New  York,      At  the  Manhattan  Company,  and 

the  Mechanics'  Bank. 
At  Albany,  At  the  New  York  State  Bank,  and 

the  Mechanics  and  Farmers'  Bank. 
At  Philadelphia,  At  the  Bank  of  Pennsylvania, 

the  Farmers'  and  Mechanics'  Bank,  and 
the  Philadelphia  Bank. 
At  Baltimore,  At  the  Bank  of  Baltimore, 

the  Commercial  and  Farmers5  Bank,  and 
the  Union  Bank  of  Maryland. 
At  the  City  of  Washington,     At  the  Bank  of  Washington,  and 

the  Office  of  the  Bank  of  Columbia. 
At  Richmond,  Va.  At  the  Bank  of 'Virginia. 

At  Charleston,  S.  C.  At  the  State  Bank,  and 

the  Planters  and  Mechanics'  Bank. 
And  at  any  other  incorporated  Bank;  in  any  of  the  above  named  cities  or 
towns,  which  shall  open  books  for  receiving  subscriptions  as  aforesaid,  and 
give  stated  notice  thereof. 

WThich  books  shall  continue  open  for  receiving  subscriptions  during  the 
ordinary  hours  of  transacting  business  at  the  said  banks,  on  Friday,  the 
twelfth,  and  Saturday,  the  thirteenth  day  of  March  next.  If  more  than  six- 
teen millions  of  dollars  in  the  whole,  shall  be  subscribed,  the  surplus  shall 
be  deducted  in  proportion  to  the  sums  subscribed  in  each  place  respectively, 
by  a  reduction  of  the  subscriptions  exceeding  four  thousand  dollars.  But 
no  reduction  shall  be  made,  of  the  subscriptions  made  by  any  persons  or  bo- 
dies corporate,  holders  (at  the  time  of  subscribing)  of  stock  issued  under 
the  act  of  March  14,  1812,  called  "six  per  cent,  stock  of  1S12;"  unless 
the  aggregate  of  their  subscriptions  should  exceed  sixteen  millions  of  dollars; 
in  which  case  the  surplus  shall  be  deducted  by  a  reduction  of  the  proportion- 
ally highest  subscriptions.  If  any  subscription  shall  be  thus  reduced,  the 
amount  of  such  reduction  shall  be  forthwith  returned  to  the  subscriber  from 
whom  such  reduction  shall  have  been  made. 

2.  No  subscriptions  will  be  received  for  a  sum  less  than  one  hundred 
dollars,  nor  for  a  fractional  part  of  a  hundred  dollars. 

3.  For  every  hundred  dollars  which  may  be  subscribed,  there  shall  be 
paid  at  the  time  of  subscribing,  twelve  dollars  and  fifty  cents,  and  a  like 
sum  of  twelve  dollars  and  fifty  cents  on  the  first  day  of  each  of  the  ensuing 


1813.]  SECRETARY  OF  THE  TREASURY.  495 

months  of  April,  May,  June,  July,  August,  September  and  October,  one 
thousand  eight  hundred  and  thirteen,  respectively.  Each  subscriber,  at  the 
time  of  paying  any  of  the  above  instalments,  after  the  first,  may  pay  all  or 
any  number  of  the  subsequent  instalments,  and  will  be  entitled  to  receive 
interest,  at  the  rate  of  six  per  centum,  per  annum  on  the  amount  thus  paid, 
from  the  time  of  actual  payment. 

4.  On  the  failure  of  payment  of  any  instalment  of  the  sums  subscribed, 
according  to  the  tenor  of  the  third  article,  the  next  preceding  instalment  of 
twelve  dollars  and  fifty  cents,  which  shall  have  been  paid  for  every  hundred 
dollars  subscribed,  shali  be  forfeited  to  the  United  States. 

5.  Each  subsequent  instalment  must  be  paid  at  the  same  bank  at  which 
the  original  subscription  was  made,  and  where  the  first  instalment  was  paid. 

6.  The  cashiers  of  the  respective  banks  where  subscriptions  are  received, 
shall,  within  twenty  days  after  the  time  of  subscribing,  give  certificates 
stating  the  sums  subscribed  and  payment  made,  and  on  which  the  payments 
of  the  subsequent  instalments,  when  made,  shall  be  respectively  endorsed; 
which  certificates  shall  be  assignable  by  endorsement  and  delivery  of  the 
parties  in  whose  favor  they  may  be  issued,  until  the  completion  of  the  pay- 
ments required  by  the  tenor  of  the  third  article. 

7.  After  the  completion  of  the  payments  aforesaid,  the  proprietors  of  the 
certificates  of  the  cashiers,  on  which  such  payments  have  been  completed, 
on  surrendering  the  same  at  the  loan  office  of  the  State  in  which  the  sub- 
scription and  payments  shall  have  been  made,  shall  be  entitled  to  receive 
from  the  Commissioner  of  Loans,  certificates  of  funded  capital  stock  for  the 
amount  thus  subscribed  and  paid,  bearing  an  interest  of  six  per  centum  per 
annum  from  the  time  when  the  said  instalments  shall  have  been  paid  re- 
spectively, and  payable  quarter  yearly  at  the  several  loan  offices,  or  at  the 
Treasury  of  the  United  States,  where  the  same  may  stand  credited:  And 
shall,  moreover,  receive  from  the  Commissioner  of  Loans,  a  certificate  en- 
titling such  proprietor  to  an  annuity  or  annual  sum,  payable  quarter  yearly, 
for  thirteen  years,  commencing  on  the  first  day  of  January,  one  thousand 
eight  hundred  and  thirteen,  of  one  dollar  on  every  hundred  dollars  thus 
subscribed  and  paid;  which  certificates  of  annuity  shall  constitute  a  separate 
and  distinct  stock,  and  may  be  sold,  assigned,  and  transferred  to  and  from 
the  books  of  the  Treasury,  or  of  the  several  loan  offices,  separately  and  dis- 
tinctly from  the  aforesaid  funded  capital  six  per  cent,  stock.  And  the  said 
funded  capital  stock,  and  the  said  annuities  shall  be  transferable  by  their 
respective  proprietors  in  person,  or  by  their  attornies  duly  constituted,  in 
the  same  manner  as  the  present  funded  debt  of  the  United  States,  and  in 
pursuance  of  the  rules  which  have  been,  or  which  may  be  established,  rela- 
tive to  the  transfer  of  the  said  debt. 

8.  After  the  payment  of  the  fifth  instalment,  such  oi  the  proprietors  of 
the  certificates  of  the  cashiers,  of  two  hundred  dollars  and  upwards,  as  may 
then  be  desirous  of  funding  the  same,  may,  on  presenting  them  at  the  loan 
office  of  the  State  in  which  the  subscription  and  payments  shall  have  been 
made,  receive  from  the  Commissioner  of  Loans,  certificates  of  funded  capital 
six  per  cent,  stock,  for  the  amount  of  the  four  first  instalments,  or  one  moiety 
of  the  sum  expressed  in  the  certificates  of  the  cashiers;  and  also  certificates 
for  one  moiety  of  the  thirteen  years'  annuity  of  one  dollar  on  the  hundred 
dollars  subscribed.  But  no  certificate  of  funded  capital  six  percent,  stock, 
including  a  fractional  part  of  a  hundred  dollars,  or  certificate  of  annuity  in- 
cluding a  fractional  part  of  a  dollar,  will  be  issued. 


496  REPORTS  OF  THE  [181S. 

9.  After  the  last  day  of  December,  in  the  year  one  thousand  eight  hun- 
dred and  twenty-five,  and  after  reasonable  notice  to  the  creditors,  which 
shall  be  given  by  an  advertisement  in  some  public  newspaper,  printed  at  the 
seat  of  the  government  of  the  United  States,  the  said  capital  six  per  cent. 
stock  shall  be  redeemable  at  the  pleasure  of  the  United  States,  by  the  reim- 
bursement of  the  whole  sum  which  may  at  that  time  stand  credited  to  any 
proprietor  on  the  books  of  the  Treasury  or  of  the  loan  offices  respectively. 
And  the  payments  of  the  said  annuities  for  thirteen  years,  shall  cease  and 
determine  on  the  first  day  of  January,  one  thousand  eight  hundred  and 
twenty-six,  when  the  certificates  of  the  same  shall  be  surrendered  up  and 
cancelled. 

10.  So  much  of  the  funds  constituting  the  annual  appropriation  of  eight 
millions  of  dollars  for  the  payment  of  the  principal  and  interest  of  the  pub- 
lic debt  of  the  United  States,  as  may  be  necessary  for  the  regular  payment 
of  the  interest,  and  for  the  reimbursement  of  the  principal  of  the  stock,  and 
for  the  regular  payment  of  the  annuities  to  be  created  under  this  contract, 
together  with  the  faith  of  the  United  States  for  its  due  fulfilment,  are  here- 
by pledged  in  pursuance  of,  and  according  to  the  terms  and  conditions  of  the 
act  of  Congress  herein  before  recited. 

Given  under  my  hand  and  the  seal  of  the  Treasury  of  the  United  States, 
at  Washington,  this  twentieth  day  of  February,  one  thousand  eight 
hundred  and  thirteen. 

Secretary  of  the  Treasury. 


B.  2. 
UNITED  STATES'  LOAN. 

Treasury  Department,  March  18th,  1813. 

Notice  is  hereby  given,  that  the  books  for  receiving  subscriptions  to  the 
Loan,  authorized  by  the  act  of  Congress,  of  February  8th,  1813,  will  again 
be  opened  on  the  25th  day  of  this  month,  on  the  same  terms  and  conditions 
as  heretofore,  and  continue  so  open  till  the  31st  day  of  this  month,  unless 
sooner  closed  by  public  notice,  at  the  following  places,  and  for  the  following 
sums  respectively,  that  is  to  say: 

At  New  York,  for  five  millions  of  dollars,  at  the  Manhattan  Company, 
Mechanics'  Bank,  City  Bank,  Merchants'  Bank,  Bank  of  America. 

At  Philadelphia,  for  five  millions  of  dollars,  at  the  Bank  of  Pennsylvania, 
Farmers  and  Mechanics'  Bank,  Philadelphia  Bank,  Stephen  Girard's  Bank. 

At  Baltimore,  for  one  million  seven  hundred  thousand  dollars,  at  the 
Bank  of  Baltimore,  Commercial  and  Farmers'  Bank,  Union  Bank  of  Mary- 
land, Mechanics'  Bank,  Marine  Bank. 

At  Washington,  for  three  hundred  thousand  dollars,  at  the  Bank  of  Wash- 
ington, office  of  the  Bank  of  Columbia. 

Proposals  will  also  be  received  by  the  Secretary  of  the  Treasury,  until  the 
fifth  clay  of  April  next,  from  any  person  or  persons,  body  or  bodies  corpo- 
rate, who  may  offer  for  themselves  or  others,  to  subscribe  for  the  whole  or 
part  of  the  residue  of  the  Loan  aforesaid,  which  may  not  have  been  sub- 
scribed for  prior  to  the  1st  day  of  April  next.  The  proposals  must  distinctly 
Mate  the  amount  offered  to  be  loaned,  the  species  of  stock  or  stocks,  which 


1813.]  SECRETARY  OF  THE  TREASURY.  497 

the  parties  wish  to  obtain,  and  the  price  they  will  allow  for  the  same.  Unless 
a  different  modification  should  be  asked  in  the  proposal,  it  will  be  understood 
that  the  amount  loaned  will  be  paid  into  the  Treasury,  in  four  equal  instal- 
ments; viz:  on  the  15th  days  of  April,  June,  August,  and  October  next;  and 
that  the  stock  issued  will  be  irredeemable  till  the  31st  day  of  December,  1825. 

If  proposals  shall  be  made  amounting  together  to  a  greater  sum  than  that 
required,  the  preference  will,  on  equal  terms,  be  given  to  stockholders  of 
the  six  per  cent,  stock  of  1812. 

If  any  proposals  differing  in  terms  from  one  another,  or  from  those  on 
which  subscriptions  have  already  or  may  be  made  prior  to  the  1st  day  of 
April  next,  should  be  accepted,  all  the  parties,  including  those  who  have 
already  subscribed,  or  may  subscribe  prior  to  the  1st  day  of  April  next,  shall 
be  placed  on  the  same  footing,  by  giving  to  all  the  option  either  of  the  terms 
offered  by  them,  or  on  which  they  have  subscribed,  or  of  those  offered  by 
any  other  persons,  and  which  shall  have  been  accepted. 

No  proposal  will  be  received  for  a  sum  less  than  one  hundred  thousand 
dollars.  But  a  commission  of  one  quarter  per  cent,  will  be  allowed  to  any 
person  collecting  subscriptions  for  the  purpose  of  incorporating  them  in  one 
proposal,  to  the  amount  of  one  hundred  thousand  dollars  or  upwards;  provided 
that  such  proposal  shall  be  accepted. 

All  the  proposals  must  be  transmitted  by  duplicates,  one  directed  to  the 
City  of  Washington,  and  the  other  (under  cover  of  the  Cashier  of  the  Bank 
of  Pennsylvania,)  to  Philadelphia. 

ALBERT  GALLATIN, 

Secretary  of  the   Treasury. 


B.  3. 

UNITED  STATES'  LOAN. 

Treasury  Department,  April  1 5th,  1813. 

Those  persons  who  have  subscribed  to  the  United  States'  Loan  of  Sixteen 
millions  of  dollars,  prior  to  the  1st  day  of  the  present  month  of  April,  are 
hereby  notified,  that  terms  different  from  those  under  which  they  made  their 
subscriptions  have  been  allowed  to  the  persons  who  have  taken  the  remain- 
der of  the  said  Loan  of  sixteen  millions;  and  that,  conformably  to  the  public 
notification  from  this  Department,  of  the  ISth  of  March  last,  those  who  sub- 
scribed prior  to  the  1st  of  April  have  the  privilege  of  taking  the  terms  thus 
subsequently  allowed;  and  which  terms  are  as  follows,  viz: 

1st.  That  the  subscriber  shall  receive  a  six  per  cent,  stock,  the  interest 
payable  quarter  yearly,  redeemable  at  the  pleasure  of  the  United  States,  at 
any  time  after  the  end  of  the  year  1825,  at  the  rate  of  eighty-eight  per  cent; 
or  100  dollars  in  stock  for  88  dollars  in  money. 

Or,  2d.  That  the  subscriber,  for  every  hundred  dollars  in  money  shall 
receive  one  hundred  dollars  in  the  same  species  of  six  per  cent,  stock,  and 
an  annuity  for  thirteen  years  from  the  1st  da}r  of  January  last,  of  one  dollar 
and  fifty  cents,  payable  quarter  yearly. 

The  subscribers  who  may  wish  to  avail  themselves  of  these  terms,  will 
present  their  scrip-certificates  to  the  Cashier  of  the  Bank,  by  whom  they 
were  issued,  and  will  express,  in  writing,  on  the  face  of  the  same,  which  of 
the  above  terms  they  will  elect  to  accept,  and  will  receive  from  the  Cashier 


498  REPORTS  OF  THE  .  [1813. 

new  scrip-certificates  conformably  thereto;  the  payments  upon  which,  and 
funding  whereof,  are  to  be  effected  in  the  same  manner  as  before. 

Such  subscribers  as  have  already  completed  their  payments,  and  obtained 
certificates  of  funded  stock  and  annuities  on  the  terms  originally  proposed, 
are  to  surrender  the  same  to  the  Commissioner  of  Loans,  or  to  the  Register 
of  the  Treasury,  by  whom  they  were  issued,  expressing  their  election  in  the 
same  manner;  and  will  receive  from  him  certificates  of  funded  stock,  and  of 
annuities,  as  the  case  may  be,  in  conformity  with  the  election  they  may  thus 
make. 

ALBERT  GALLATIN, 

Secretary  of  the   Treasury. 

c. 

View  of  the  Sinking  Fu?id,  for  the  year  1813. 

The  balance  belonging  to  this  fund,  remaining  unapplied 
on  the  31st  December,  1812,  (per  report  of  Commissioners, 
to  Congress,  of  February  6, 1813,)  was      -  $3,550,369   11 

The  annual  appropriation  for  the  year  1S13,       -  -       8,000,000  00 

Making  together,  -  11,550,369   11 

There  was  applied,  during  the  first  quarter  of  the  year  1813,      1,036,868  28 


Leaving  to  be  applied,  in  the  three  last  quarters  of  that  year  $10,513,500  83 

The  manner  in  which  the  amount  will  be  applied  in  the 
year  1813,  is  as  follows: 

Interest  and  reimbursement  of  old  six  and  deferred  stocks, 
estimated  at  ------       2,160,00000 

Interest  on  exchanged  six  per  cent,  stock  of  1812,  -  180,000  00 

Ditto  on  three  per  cent,  stock,  -  485,000  00 

Ditto  on  1796  six  per  cent,  stock,      -  5,000  00 

Ditto  on  Louisiana  stock,  and   charges,  -  -  680,000  00 

Ditto  on  six  per  cent,  stock  of  1812,  including  tempo- 
rary bank  loans  and  some  arrearages,         -  700,000  00 
Interest  on  new  stock  of  1813,                -                                       470,000  00 
Principal  of  temporary  loans  reimbursable  in  1813,       -       1,350,000  00 
Treasury  Notes,  including  those  payable  on  the  1st  and 
11th  January,  1S14,  which  must  be  provided  for  by  the  31st 
December,  1  SI  3,               -             -             -              3,804,500 
Interest  on  the  same,    -                                             205,443 

say  4,010,000  00 


10,040,000  00 
There  was  paid  on  account  of  the  above,  in  the  1st  quar- 
ter of  1813,  ---.._       1,036,868  28 


Leaving  payable  in  the  three  last  quarters  of  that  year,  say  9,000,000  00 
And  wiil  leave  to  be  applied  to  the  purchase  of  stock,  or 
to  be  carried  to  the  Sinking  Fund,  for  the  year  1814,  1,513,500  83 


10,51  S,500  83 


1813.]  SECRETARY  OF  THE  TREASURY.  499 

REPORT  ON  THE  FINANCES. 

DECEMBER,  1813. 


In  obedience  to  the  directions  of  the  "  Act  supplementary  to  the  act  en- 
titled <  An  act  to  establish  the  Treasury  Department,"  the  actino-  Secretary 
of  the  Treasury  respectfully  submits  the  following  report  and  estimates. 

The  moneys  actually  received  into  the  Treasury  during  the  year  ending 
on  the  30th  September,  1813,  have  amounted  to    -  -  $37,544,954  93 

Viz:  Proceeds  of   the  customs,  sales  of  lands,  small  branch 
ofrevenue,  and  repayments,  -  -         13,568,042  43 

Proceeds  of  loans,  viz: 
Loan  of  eleven  millions  under  the  act  of  March, 

14th,  1812,  -  -  4,337,4S7   50 

Loan  of  sixteen  millions,  under 

the  act  of  February  8,  1813,     14,4S8,125  00 
TreasuryNotes  under  the  acts  of 

June  30,  1812,  and  February 

25,  1813,  -  -  5,151,300  00 

23,976,912   50 


As  will  appear  by  the  annexed  statement  E.,  $  37,544,954  93 

Making,    together  with  the  balance  in  the  Treasury  on  the 
1st  of  October,  1812,  which  was         -  2,362,652  69 


An  aggregate  of    -  -  -  -  $  39,907,607  62 

The  payments  from  the  Treasury  during  the  same  period, 
have  amounted  to       -  32,928,855  19 

Viz:     For  Civil,  Diplomatic,  and  Miscellaneous  expenses, 
both  foreign  and  domestic,     -  1,705,916   35 

Military  Department,  including  militia  and 
volunteers,  and  the  Indian  Department,  18,484,750  49 

Navy,  including  the  building  of  new  ships, 
and  the  marine  corps,  -  -  6,420,707  20 

Public  Debt: 

On  account  of  interest,  3,120,379  08 

Principal  reimbursed,  3,197,102  07 

6,317,481    15 


As  will  also  appear  by  the  annexed  statement  E.,  32,928,855  19 

And  left  in  the  Treasury,  on  the  30th  of  September  last,       6,978,752  43 

g39,907,607   62 

64 


500  REPORTS  OF  THE  [1813. 

The  accounts  for  the  fourth  quarter  of  the  year  1813,  have  not  yet  been 
made  up  at  the  Treasury;  but  the  receipts  and  expenditures,  during  that  quar- 
ter, have  been  nearly  as  follows: 

Receipts  from  the  customs,  sales  of  lands,  and   small  branches  of  the  re- 
venue, about  -  -  -  -  -  -     3,300,000  00 

Loan  of  sixteen  millions,-  _  _  _  _     1,500,000  00 

Loan  of  seven  and  a  half  millions,  -  3,850,000  00 

Treasury  Notes,  -  3,680,000  00 


12,330,000  00 
Making,  with  the  balance  in  the  Treasury,  on  the  1st  of 
October,  1813,  of  -  -  -  -  -       6,9 78, 752  43 


An  aggregate  of  about  -  §19,309,000  00 


The  disbursements  have  been,  for  Civil,  Diplomatic,  and 

Miscellaneous  expenses,  about       -  400,000  00 

Military  Department,                   -'■'■           -              -              -  5,887,747  00 

Naval                do              -              -              -              ...  1,248,145   10 

Public  Debt,  (of  which  near  6,000,000,  was  on  account  of 

the  reimbursement  of  principal,)                 -  7,087,994  95 

And  leaving  in  the  Treasury,  on  the  31st. Dec'r,  1S13,  about  4,685,112  95 

$  19,309,000  00 


Of  the  sums  obtained  on  loan  during  the  year  1813,  and  included  in  the 
receipts  above  stated,  an  account  of  the  terms  on  which  they  were  made,  has 
been  laid  before  Congress,  excepting  as  to  the  Treasury  Notes  issued  under 
the  act  of  February  25,  1813,  and  the  loan  of  seven  and  a  half  millions  ob- 
tained under  the  authority  contained  in  the  act  of  the  2d  of  August,  1813. 
The  annexed  statement,  marked  F.,  will  show  the  whole  amount  received 
for  Treasury  Notes  during  the  year  1S13,  and  at  what  places  they  were  sold 
or  disposed  of.  Three  millions  eight  hundred  and  sixty-five  thousand  one 
hundred  dollars,  of  the  notes  issued  under  the  act  of  June  30th,  1812,  be- 
came due  in  the  course  of  the  year  1813,  or  in  the  present  month  of  Janua- 
ry, and  have  been  paid  off,  or  the  funds  placed  in  the  hands  of  the  Commis- 
sioners of  Loans  for  that  purpose. 

The  papers  under  the  letter  G.,  will  show  the  measures  taken  under  the 
act  of  August  2d,  1813,  authorizing  a  loan  of  seven  millions  five  hundred 
thousand  dollars,  and  the  manner  in  which  that  loan  was  obtained.  The 
terms  were  eighty-eight  dollars  and  twenty-five  cents  in  money  for  one 
hundred  dollars  in  stock,  bearing  an  interest  of  six  per  cent. ;  which  is  equi- 
valent to  a  premium  of  thirteen  dollars  thirty-one  cents  and  four-ninths  of  a 
cent,  on  each  hundred  dollars  in  money  loaned  to  the  United  States."  Of 
this  sum  of  7,500,000  dollars,  about  3,850,000  dollars  were  paid  into  the 
Treasury  during  the  year  1813,  and  the  remainder  is  payable  in  the  months 
of  January  and  February,  1814. 

For  the  year  1814,  the  expenditures,  as  now  authorized  by  law,  are  esti- 
mated as  follows  : 

1.  Civil,  Diplomatic,  and  Miscellaneous  expenses,  $1,700,000 

2.  Public  Debt,  viz: 

Interest  on  the  debt  existing  previous  to  the  war,  2,100,000 


1813.]  SECRETARY  OF  THE  TREASURY.  5qj 

Interest  on  debt  contracted   since  the  war,   in- 
cluding Treasury  Notes,  and  loan  for  the  year  1814,    2,950,000 


5,050,000 


Reimbursement  of  principal,  including  the  old 
six  and  deferred  stocks,  temporary  loans  and  Trea- 
sury Notes,         -  -  -  -  -     7,150,000 


12,200,000 


3.  Military  establishment,  estimated  by  the  Secretary  of 
War,  for  a  full  complement,  (including  rangers,  seafencibles, 
and  troops  of  all  descriptions,)  of  63,422  officers  and  men, 
and  including  ordnance,  fortifications,  and  the  Indian  Depart- 
ment, and  the  permanent  appropriations  for  Indian  treaties, 

and  for  arming  and  equipping  the  militia,  -  -  24,550,000 

4.  Navy,  estimated  for  15,787  officers,  seamen  and  boys, 
and  for  1,869  marines,  and  including  the  service  of  two  74 
ships  for  four  months,  and  three  additional  frigates  for  six 
months  of  the  year  1S14,  and  the  expenses  of  flotillas  on  the 

coast  and  on  the  lakes,      -  -  -  -  -  -  6,900,000 


Amounting  altogether,  to     -  $  45,350,000 


The  ways  and  means  already  provided  by  law,  are  as  follows: 

1.  Customs  and  sales  of  public  lands.  The  nett  revenue  accruing  from 
the  customs  during  the  year  1812,  amounted,  as  will  appear  by  the  annexed 
statements  A  and  B.,  to  13,142,000  dollars.  Of  this  sum,  about  4,300,000 
dollars  was  produced  by  the  additional  duties  imposed  by  the  act  of  July  1, 
1812.  The  duties  which  have  accrued  during  tiie  year  1813,  are  estimated 
at  7,000,000  dollars.  The  custom-house  bonds  outstanding  on  the  1st  Janu- 
ary, 1814,  after  making  a  due  allowance  for  insolvencies  and  bad  debts,  are 
estimated  at  5,500,000  dollars;  and  it  is  believed  that  6,000,000  dollars  may 
be  estimated  for  the  receipt  of  the  customs  during  the  year  1814.  The  sales 
of  public  lands,  during  the  year  ending  September  30, 1813,  have  amounted 
to  256,345  acres,  and  the  payments  by  purchasers  to  706,000  dollars,  as 
will  appear  by  the  annexed  statement  C.  It  is  estimated  that  600,000  dol- 
lars will  be  received  into  the  Treasury  from  this  source,  during  the  year 
1814.  The  sum,  therefore,  estimated  as  receivable  from  customs  and  lands, 
is  -  -  -  -  -  "  .  -  -       6,600,000 

2.  Internal  revenues  and  direct  tax:  from  the  credits  allow- 
ed by  law  on  some  of  the  internal  duties,  and  from  the  de- 
lays incident  to  the  assessment  and  collection  of  the  direct 
tax,  it  is  not  believed  that  more  ought  to  be  expected  to  come 

into  the  Treasury  during  the  year  1814,  than  the  sum  of  3,500,000 

3.  Balance  of  the  loan  of  seven  and  a  half  millions  alrea- 
dy contracted  for       -  -  -  -  -  -         3,650,000 

4.  Balance  of  Treasury  Notes  already  authorized,  -         1,070,000 

5.  Of  the  balance  of  cash  in  the  Treasury,  on  the  31st  De- 
cember, 1813,  amounting,  as  above  stated,  to  about  4,680,000 

There  will  be  required  to  satisfy  appropriations 
made  prior  to  that  day,  and  then  undrawn,  at  least  3,500,000 


5Q2  REPORTS  OF  THE  {"1813. 

And  leaving  applicable  to  the  service  of  the  year  1814,  $1 ,180,000 

16,000,000 
So  that  there  remains  to  be  provided  by  loans,  the  sum  of         29,350,000 


$45,350,000 


Although  the  interest  paid  upon  Treasury  Notes,  is  considerably  less 
than  that  paid  for  the  moneys  obtained  by  the  United  States  on  funded  stock, 
yet  the  certainty  of  their  reimbursement  at  the  end  of  one  year,  and  the  fa- 
cilities they  afford  for  remittances  and  other  commercial  operations,  have 
obtained  for  them  a  currency  which  leaves  little  reason  to  doubt  that  they 
may  be  extended  considerably  beyond  the  sum  of  five  millions  of  dollars, 
hitherto  authorized  to  be  annually  issued.  It  will  perhaps  be  eligible  to 
leave  to  the  Executive,  as  was  done  last  year,  a  discretion  as  to  the  amount 
to  be  borrowed  upon  stock  or  upon  Treasury  Notes,  that  one  or  the  other 
may  be  resorted  to,  within  prescribed  limits,  as  shall  be  found  most  advan- 
tageous to  the  United  States. 

The  amount  estimated  to  have  been  reimbursed  of  the  principal  of  the 
public  debt,  during  the  year  ending  on  the  SOth  September  last,  including 
Treasury  Notes  and  temporary  loans,  will  appear,  by  the  estimate  marked 
D.,  to  have  been  3,201,368  dollars.  As  the  payments  on  account  of  the 
loan  of  sixteen  millions  had  not  then  been  completed,  and  the  stock  had 
consequently  not  been  issued  therefor,  it  is  not  practicable  to  state  with  pre- 
cision the  amount  added  to  the  public  debt  during  that  year;  but' after  de- 
ducting the  above-mentioned  reimbursement  of  3,200,000  dollars,  this  ad- 
dition will  not  fall  short  of  22,500,000  dollars. 

The  plan  of  finance  proposed  at  the  commencement  of  the  war,  was  to 
make  the  revenue  during  each  year  of  its  continuance  equal  to  the  expenses 
of  the  peace  establishment  and  of  the  interest  on  the  old  debt  then  existing 
and  on  the  loans  which  the  war  might  render  necessary,  and  to  defray  the 
extraordinary  expenses  of  the  war  out  of  the  proceeds  of  loans  to  be  ob- 
tained for  that  purpose. 

The  expenses  of  the  peace  establishment  as  it  existed  previous  to  the  ar- 
maments of  1812,  made  in  contemplation  of  war,  but  including  the  eio-ht 
regiments  added  to  the  military  establishment  in  the  year  1808,  and,the 
augmentation  of  the  navy  in  actual  service,  authorized  in  1809,  amounted, 
after  deducting  some  casual  expenses  of  militia  and  other  incidental  items, 
to  about  ----__  $7,000,000 

The  interest  on  the  public  debt  payable  during  the  year  1814, 
will  be:  on  the  old  debt,  or  that  existing  prior  to  the  present 
war>       "  2,100,000 

On  the  debt  contracted  since  the  commencement  of 
the  war,  including  Treasury  Notes,  and  allowing 
560,000  dollars  for  interest  on  the  loan  which  must  be 
made  during  the  year  1814,  a  sum  as  small  as  can  be 
estimated  for  this  object,  -  .  .  2,950,000 


5,050,000 

Making  $12,050,000 


1813.]  SECRETARY  OF  THE  TREASURY.  503 

The  actual  receipts  into  the  Treasury  from  the  revenue,  as  now  established, 
including  the  internal  revenues  and  direct  tax,  ore  not  estimated  for  the  year 
1814,  at  more  than  -'.  -  -  -  -.  10,100,000 

Viz:  from  customs  and  puhlic  lands,  -  6,600,000 

Internal  revenues  and  direct  tax,  -  3,500,000 


10,100,000 


If  to  this  sum  be  added  that  part  of  the  balance  in  the  Treasu- 
ry on  the  31st  December,  1813,  which  has  been  estimated  above, 
to  be  applicable  to  the  expenses  of  the  year  1814,  and  which, 
upon  the  principle  above  stated,  may  be  considered  as  a  surplus 
of  revenue  beyond  the  expenses  of  the  peace  establishment,  and 
of  the  interest  on  the  public  debt  for  the  year  1813,  and  there- 
fore applicable  to  the  same  expenses  for  the  year  1814,  which 
sum  is  estimated  at         -  J, 180,000 


and  making  together      -----  11,280,000 

there  will  still  remain  to  be  provided,    new  revenues  capable  of 
producing  ------  770,000 


$12,050,000 


But  as  the  internal  revenues  and  direct  tax,  when  in  full  operation,  will 
produce,  in  the  year  1815,  probably  1,200,000  dollars  more  than  is  esti- 
mated to  be  received  from  them  in  the  year  1814,  it  will  rest  with  Congress 
to  decide  whether  it  is  necessary  that  new  and  additional  revenues  should 
now  be  established. 

To  what  extent  the  existing  embargo  may  reduce  the  receipts  into  the 
Treasury  from  the  customs  during  the  year  1815,  it  is  difficult  to  estimate, 
as  the  operation  of  the  war  had  reduced  the  receipts  from  the  customs  near- 
ly one  half  from  that  which  was  received  during  the  year  preceding  the 
war. 

The  former  embargo  reduced  the  revenue  from  the  customs  nearly  one- 
half  the  amount  of  that  which  was  received  during  the  year  preceding  its 
full  operation.  In  this  case,  however,  the  transition  was  from  the  full  re- 
ceipt of  a  peace  revenue  to  the  entire  suspension  of  exportation  and  of  fo- 
reign commerce  in  American  bottoms.  It  is  not,  therefore,  to  be  presumed, 
that  the  existing  embargo  will  cause  a  reduction  of  the  war  revenue  in  the 
proportion  Of  the  peace  revenue:  moreover,  the  effect  of  the  act  prohibiting 
the  importation  of  certain  articles,  necessarily  increases  the  demand  and 
enhances  the  value  of  those  which  may  be  lawfully  imported;  and  the  high 
price  they  bear  will  produce  extraordinary  importations,  and  in  part  com- 
pensate for  the  prohibition  to  export  any  thing  in  return;  to  this  may  be 
added  the  duty  on  salt,  the  operation  of  which    is  yet  but  partial. 

To  the  amount  of  the  defalcation  of  the  revenue  caused  by  the  embargo, 
whatever  it  may  be,  must  be  added  the  difference  between  the  amount  of 
the  interest  payable  in  the  year. 1814  on  the  loan  of  that  }^ear,  and  the 
whole  amount  of  the  interest  on  the  said  loan  payable  in  the  year  1S15, 
as  well  as  that  part  of  the  interest  which  may  be  payable  in  the  year 
1815  on  the  loan  of  that  year.     The  sum   of  these  items  will   be  required 


504  REPORTS  OF  THE  [1813. 

for  the  year  1815,  in  addition  to  the  revenues  now  established,  except 
430,000  dollars,  being  the  difference  between  the  estimated  increase  in  the 
receipt  of  the  internal  revenues  and  direct  taxes  and  the  770,000  dollars  re- 
maining to  be  provided  for  in  the  foregoing  estimate. 

With  these  considerations  it  is  submitted,  whether  it  may  not  be  expe- 
dient and  prudent  to  provide  new  revenues,  capable  of  producing  either  the 
whole  or  such  part  of  the  770,000  dollars  unprovided  for,  as  may  appear 
necessary  to  fulfil  the  public  engagements,  and  secure  to  the  financial  opera- 
tions of  the  government  the  confidence,  stability,  and  success  which  is  due 
to  its  fidelity  and  to  the  ample  resources  of  the  country. 

All  which  is  respectfully  submitted. 

W.  JONES, 

tdcting  Secretary  of  the  Treasury. 

Treasury  Department,  January  Sth,  1814. 


1813.] 


.SECRETARY  OF  THE  TREASURY. 


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REPORTS  OF  THE 


[1813. 


B. 

A  STATEMENT  exhibiting  the  value  and  quantities,  respectively,  of 
Merchandise  on  ivhich  duties  actually  accrued  during  the  year  1812, 
(consisting  of  the  difference  between  articles  paying  duty  import- 
ed, and  those  entitled  to  drawback,  re-exported, J  and  also,  the  nett 
Revenue  ivhich  accrued  during  that  year,  from  duties  on  Merchandise, 
Tonnage,  Passports,  and  Clearances. 


Goods  faying  duties  ad  valohem. 

3,576,643  dollars,  at  12^  per  cent. 

. 

$  447,080  38 

14,844,367     do           25  "     do 

. 

3,711,091  75 

893,846     do  - —    15         do 

. 

134,076  90 

4,354,056     do           30         do 

- 

1,306,216  80 

49,506     do           20         do 

= 

9,901  20 

108,996     do           40         do 

.    . 

43,598  40 

a  Additional  duty  on  $23,827,414, 

at  2\  per  ct, 

595,685  35 

23,827,414           -             -             -             - 

. 

6,247,650  78 

b  Spirits         2,764,135  gallons,  at  27.6  cents  i 

iverage 

761,721  68 

Do             1,338,593      do           56.6 

do 

758,760  78 

e  Sugar        38,647,755  pounds,  at    2.5  cents 

do 

979,552  48 

Do          21,518,327      do     '         5. 

do 

1,078,569  25 

d  Wines            789,413  gallons,  at  29.4  cents 

do 

232,040  97 

Do                 662,499      do           58.3 

do 

385,958  82 

e  Teas            2,258,514  pounds,  at  21.4  cents 

do 

484,541  32 

Do                385,815      do           44.9 

do 

173,068  30 

Coffee       10,994,700  pounds,  at    5      cents 

549,735  00 

Do             5,155,476      do            10       do 

- 

515,547  60 

Molasses     5,651,471  gallons,  at     5        do 

. 

282,573  55 

Do             1,721,977      do             10       do 

- 

172,197  70 

f  All  other  articles          ... 

488,131  88 

- 

13,110,050  11 

To  which  add — Duties  collected  on  merchandise,  the  par- 
ticulars of  which  could  not  be  ascertained,  after  de- 
ducting therefrom  duties  refunded  and  difference  in 
calculation,  -  -  -  -  -  85,085  63 

"2  per  cent,  retained  on  drawback 

Extra  duty  of  10  per  cent,   on  merchandise  imported  in 

foreign  vessels  .....  21,278  65 

Extra  duty  of  15J  per  cent,  on  merchandise  imported  in 

foreign  vessels  -  -  -  r  -  144,168  63 


Nett  amount  of  duties  oh  merchandise  -  -  - 

Duties  on  tonnage  ......  131,325  01 

Light  money        ------  24,027  99 

Duties  on  passports  and  clearances  - 

Gross  revenue,  as  per  statement  A.         -  -  -  ... 

Deduct  expenses  on  collection  ..... 

Nett  revenue  -  - 


13,195,135  74 
55,974  97 


165,447  28 
13,416,557  99 


155,353  00 
14,928  00 

13,586,838  99 
475,838  95 

$13,111,000  04 


1813.] 


SECRETARY  OF  THE  TREASURY. 


507 


Explanatory  Statements  and  Notes. 


a  Additional 

duty  of  2§  per  cent. 

. 

- 

- 

$595,685  35 

3$  per  cent 

.  retained  on  drawback 

. 

- 

786  54 

Extra  duty 

of  10 

per  cent,  on 

merchandise 

imported  in  foreig 

;n  vessels 

1,143  00 

597,614  89 

h  Spirits — 

Grain 

- 

- 

1st  proof 

55,253 

gallons, 

at  28  cents 

15,471  40 

Grain 

. 

. 

1st  proof 

16,427 

do 

56  cents 

9,199  12 

Grain 

. 

. 

2d  proof 

114       do 

29  cents 

33  06 

Other  materials 

:     -         1st  and  2d  proof  1,116,696       do 

25  cents 

279,174  00 

Do 

*         1st  and  2d  proof 

464,531 

do 

50  cents 

232,265  50 

Do 

- 

3d  proof 

1,063,759 

do 

28  cents 

297,852  52 

Do 

- 

3d  proof 

417,126      do 

56  cents 

233,590  56 

Do 

- 

4th  proof 

527,246       do 

32  cents 

168,718  72 

Do 

- 

4th  proof 

425,677       do 

64  cents 

272,433  28 

Do 

- 

5th  proof 

224      do 

38  cents 

85  12 

Do 

- 

5th  proof 

14,832       do 

76  cents 

11,272  32 

Do 

6th  proof 

841 

do 
gallons 

46  cents 

386  86 

4,102,728 

$1,520,482  46 

c  Sugar — 

Brown 

- 

- 

35,976,034  pounds, 

at  2J  cents 

899,400  85 

Brown 

- 

- 

20,253,037         do 

5    cents 

1,002,651  85 

White 

- 

- 

'  - 

2,671,721          do 

3    cents 

80,151  63 

White 

6' 

1,265,290 

do 

6    cents 

75,917  40 

0,166,082  j 

pounds. 

$2,058,121  73 

d  Wines — > 

Madeira, 

1st  quality, 

- 

53,175 

gallons, 

at  58  cents 

30,842  08 

Do 

do 

- 

53,116 

do 

116  cents 

61,614  56 

Do 

2d  quality, 

- 

21,166 

do 

50  cents 

10,583  00 

Do 

do 

- 

3,619 

do 

100  cents 

3,619  00 

Burgundy 

'  and  Champaign 

- 

1,052 

do 

45  cents 

473  40 

Do 

do 

- 

514         do 

90  cents 

462  60 

Sherry  and  St.  '. 

Lucar, 

- 

16,153         do 

40  cents 

6,461  20 

Do 

do 

- 

11,073         do 

80  cents 

8,858  40 

Claret,  &c.  in 

bottles,     - 

- 

15,536         do 

35  cents 

5,437  60 

Do 

do 

. 

8,339         do 

70  cents 

5,837  30 

Lisbon,  Oporto, 

,  &c. 

- 

38,733         do 

30  cents 

11,619  90 

Do 

do 

- 

. 

52,287         do 

60  cents 

31,372  20 

Teneriffe, 

Fay  a 

1,  and  Malaga 

» 

371,925         do 

28  cents 

104,139  00 

Do 

do 

do 

287,613         do 

56  cents 

161,063  28 

All  other, 

in  casks, 

- 

271,673         do 

23  cents 

62,484  79 

Do 

do 

: 

245,938 

do 

gallons. 

46  cents 

113,131  48 

1,451,912  g 

$617,999  79 

e  Teas — 

Bohea, 

- 

- 

. 

90,544  pounds, 

at  12  cents 

10,865  28 

Do 

. 

- 

. 

41,342         do 

24  cents 

9,922  08 

Souchong 

t 

-  , 

. 

45,691         do 

18  cents 

8,224  38 

Do 

. 

- 

. 

40,380         do 

36  cents 

14,536  SO 

Hyson, 

- 

• 

. 

303,708         do 

32  cents 

97,186  56 

Do 

- 

- 

. 

112,169         do 

64  cents 

71,788  16 

Other  green, 

- 

. 

1,818.571         do 

20  cents 

363,714  20 

Do 

- 

- 

. 

191,924         do 

40  cents 

76,769  60 

Extra  duty  on 

teas  imported  from 

other 

places  than '. 

[ndia, 

- 

pounds. 

4,602  56 

2,644,329 

$657,609  62 

65 


508  REPORTS  OF  THE  [1813. 

Explanatory  Statements  and  Notes — Continued. 


Quantity. 

Rate  of 

Excess  of 

Excess  of 

Excess  of 

Excess  of 

duty. 

duties  over 

drawback 

/  All  other  articles. 

importation 
over  expor- 
tation. 

exporta- 
tion over 
importa- 

Cents. 

drawback. 

over  duties. 

tion. 

Domestic  Spirits,  1st  proof, 

galls. 

28 

7 

1  96 

Do             do      1st  proof, 

do 

1,219 

- 

14 

170  66 

Do             do      4th  proof,  (from 

molasses^ 

galls. 

233 

- 

34 

79  22 

Beer,  Ale,  and  Porter, 

do 

496 

- 

8 

39  68 

Do                 do 

do 

46,039 

, 

16 

7,366  24 

Cocoa,              -             -      P 

ounds 

28,624 

. 

2 

572  48 

Do  - 

do 

748,637 

.     . 

4 

29,945  48 

Chocolate, 

do 

837 

* 

3 

25  11 

Do    - 

do 

81 

. 

6 

4  86 

Sugar  candy, 

do 

179 

- 

iii 

20  59 

Do 

do 

52 

. 

23 

11  96 

Almonds, 

do 

338,205 

- 

2 

6,764  10 

Do  - 

do 

61,022 

- 

4 

2,440  88 

Fruits — Currants, 

do 

33,562 

. 

2 

671  24 

Do 

do 

134,495 

. 

4 

5,379  80 

Prunes  and  plums, 

do 

44,090 

. 

2 

881  80 

Do 

do 

1,694 

-■ 

4 

67  76 

Figs,  - 

do 

237,178 

. 

2 

4,743  56 

Do     - 

do 

13,741 

. 

4 

549  64 

Raisins,  in  jars,  &c. 

do 

402,288 

. 

2 

8,045  76 

Do         do   - 

do 

42,066 

- 

4 

1,682  64 

Do      ail  other, 

do 

448,615 

- 

H 

6,729  22 

Do         do    - 

do 

1,475 

. 

3 

44  25 

Candles — Tallow, 

do 

- 

4,492 

2 

- 

W  84 

Wax  or  sperm., 

do 

4,318 

. 

6 

259  08 

Do           do 

do 

2,088 

. 

12 

250  56 

Cheese, 

do 

14,713 

7 

1,029  91 

Do    - 

do 

8,221 

. 

14 

1,150  94 

Soap,    -             -             - 

do 

107,236 

. 

2 

2,144  72 

Do    - 

do 

184,196 

. 

4 

7,367  84 

Tallow, 

do 

492,991 

. 

ii 

7,394  86 

Do    - 

do 

128,669 

- 

3 

3,860  07 

Spices — Mace, 

do 

3,750 

125 

- 

4,687  50 

Nutmegs, 

do 

- 

12,369 

50 

- 

6,184  50 

Cinnamon, 

do 

- 

15,022 

20 

- 

3,004  40 

Cloves, 

do 

48,236 

- 

40 

19,294  40 

Pepper, 

do 

69,681 

- 

6 

4,180  86 

Do 

do 

132,138 

- 

12 

15,856  56 

Pimento, 

do 

94,639 

- 

4 

3,785  56 

Do 

do 

53,345 

- 

8 

4,267  60 

Cassia, 

do 

166,596 

. 

4 

6,663  84 

Do 

do 

50,228 

- 

8 

4,018  24 

Tobacco,  manufact'ed,  other 

than  snuff  and  cigare, 

do 

2,172 

. 

6 

130  32 

Do               do             do 

do 

5,077 

. 

12 

609  24 

Snuff,  - 

do 

38 

. 

10 

3  80 

Do    - 

do 

355 

. 

20 

71  00 

Indigo, 

do 

9,663 

- 

25 

2,415  75 

Do    - 

do 

67,734 

. 

50 

33,867  00 

Cotton, 

do 

35,386 

. 

3 

1,061  58 

Do    - 

do 

859,192 

. 

6 

51,551  52 

Starch, 

do 

389 

. 

3 

11  67 

Do    - 

do 

4,179 

- 

6 

250  74 

1813.1  SECRETARY  OF  THE  TREASURY. 

Explanatory  Statements  and  Notes — Continued. 


509 


Quantity. 

Rate  of 

Excess  of 

Excess  of 

Excess  of 

Excess  of 

duty. 

duties  over 

drawback 

/  All  other  articles 

importation 
over  expor- 
tation . 

exporta- 
tion over 
importa- 
tion. 

Cents. 

drawback. 

over  duties. 

Gunpowder,     -             -       pounds 

6,414 

. 

8 

513  12 

Glue,                                            do 

9,608 

- 

4 

384  32 

Do    -             -             -             do 

42,130 

- 

8 

3,370  40 

Iron — Anchors  and  sheet          do 

101,659 

. 

n 

1,524  88 

Do             do               do 

404,491 

- 

3 

12,134  73 

Slit  and  hoop,    -             do 

176,131 

■ 

1 

1,761  31 

Do          do       -             do 

423,422 

. 

2 

8,468  44 

Pewter,  plates  and  dishes,       do 

4,430 

. 

8 

354  40 

Nails,                                            do 

739,462 

. 

4 

29,578  48 

Spikes,                                        do 

94,874 

2 

1,897  48 

Quicksilver,      -             -             do 

74,386 

- 

6 

4,463  16 

Do                                            do 

9,579 

- 

12 

1,149  48 

Paints — Ochre,  in  oil,               do 

336 

- 

3 

10  08 

dry,  yellow       do 

91,573 

- 

1 

915  73 

Spanish  brown,            do 

4,533 

- 

1 

45  33 

Do           -             do 

22,135 

. 

2. 

442  70 

White  and  red  lead,   do 

87,751 

. 

2 

1,755  02 

Do             do            do 

1,133,148 

4 

45,325  92 

Lead,  and  manufact's  of  lead,  do 

405,271 

. 

1 

4,052  71 

Do             do              do          do 

826,955 

. 

2 

16,539  10 

Seines,                                         do 

686 

- 

8 

54  88 

Cordage — Tarred,        -            do 

83,969 

- 

2 

1,679  38 

Do                         do 

153,786 

- 

4 

6,151  44 

JJntarred,    -            do 

46,139 

- 

n 

1,153  47 

Do             -             do 

23,184 

- 

5 

1,159  20 

Cables,              -             -             do 

- 

33,557 

2 

- 

671  14 

Steel,   -            -            -           cwt. 

2,332,223 

- 

100 

2,332  71 

Do    -             -             -             do 

5,626,212 

- 

200 

11,253  21 

Hemp,                                         do 

17,529,323 

100 

17,529  96 

Do    -             -             -             do 

293,300 

• 

200 

587  50 

Twine,               -             -             do 

125,221 

- 

400 

502  75 

Do    -             -            -             do 

566,303 

. 

800 

4,534  21 

Glauber  salts,                            do 

6,306 

- 

400 

27  21 

Coal,    -                                 bushels 

4,737 

- 

5 

236  85 

. 

Do    -             -             -             do 

96,456 

. 

10 

9,645  60 

Malt,    -             -             -             do 

6 

- 

20 

1  20 

Fish — Dried  or  smoked,    quintals 

1 

. 

50 

50 

/ 

Do           do      -             do 

9,095 

- 

100 

9,095  00 

Pickled  salmon,         barrels 

690 

- 

200 

1,380  00 

mackerel,         do 

86 

. 

120 

103  20 

all  other,           do 

73 

. 

40 

29  20 

Do  -             do 

380 

. 

80 

304  00 

Glass— black  quart  bottles,  gross 

925 

• 

60 

555  00 

Do          do    -            do 

2,470 

- 

120 

2,964  00 

window,  not  above  8  by  10, 

100  sq.  ft. 

1,413 

- 

160 

2,260  80 

Do       do     do             do 

3,952 

- 

320 

12,646  40 

Do      do  10  by  12,   do 

151 

- 

175 

264  25 

Do       do     do             do 

282 

- 

350 

987  00 

all  above  do            do 

26 

225 

58  50 

Do      do     do            do 

463 

. 

450 

2,083  50 

Cigars,              .             -              M 

7,745 

- 

200 

15,490  00 

Do    -            -            -            do 

2,668 

[i 

400 

10,672  00 

510 


REPORTS  OF  THE  [1813. 

Explanatory  Statements  and  Notes — Continued. 


Quantity. 

Rate  of 

Excess  of 

Excess  of 

Excess  of 

Excess  of 

duty. 

duties  over 

drawback 

/  All  other  articles. 

importation 
over  expor- 
tation. 

tion  over 
importa- 
tion. 

Cents. 

drawback. 

over  duties. 

Boots,  - 

pairs 

414 

. 

150 

621  00 

Do    - 

do 

1 

- 

75 

75 

Shoes  and  Slippers — Silk, 

do 

3,692 

- 

25 

923  00 

Do 

do 

581 

- 

50 

290  50 

Kid  &  Mor 

do 

6,943 

. 

15 

1,041  45 

Do      do 

do 

5,144 

- 

30 

1,543  20 

Children's 

do 

53 

- 

10 

5  30 

Do 

do 

105 

- 

20 

21  00 

Cards — Wool  and  cotton,   dc 

zens 

3 

- 

50 

1  50 

Paints — Ochre,  dry  yellow, 

lbs. 

7,765 

2 

155  30 

502,769  26 

14,637  38 

Deduct  excess  of  drawback 

over 

duties. 

$ 

14,637  38 

488,131  88 

Tkeasury  Department, 

Register's  Office,  December  9th,  1813. 

JOSEPH  NQURSE. 


1813.] 


SECRETARY  OF  THE  TREASURY. 


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518  REPORTS  OF  THE  [1813. 


F. 

STATEMENT  of  Moneys  received  into  the  Treasury  during  the  year 

1813,  for  Treasury  Notes,  bearing  interest,  at  the  rate  of  5-|  per  cent, 
per  annum. 

Notes  issued  under  the  act  of  June  30th,  1812: 

Received  aTthe  State  Bank,  Boston,     -  $400,000  00 

Manhattan  Bank,  NewYork,    -             -  400,000  00 

Mechanics'  Bank,     do.              -             -  600,000  00 

New  York  State  Bank,  Albany,            -  179,800  00 

Bank  of  Pennsylvania,  Philadelphia,    -  185,600  00 

Bank  of  Columbia,  Washington,           -  100,000  00 

Union  Bank,  Georgetown,  Columbia,  - .,  50,000  00 

Bank  of  Chillicothe,Chillicothe,           -  49,100  00 

Miami  Exporting  Company,  Cincinnati,  100,000  00 

Bank  of  Kentucky,  Frankfort,             -  100,000  00 


2,164,500  00 


Notes  issued  under  the  act  of  February  25th,  1813: 

Received  at  the  Cumberland  Bank,  Portland,  -             -  $ 100, 000  00 

Merchants'  Bank,  Salem,         -             -  30,000  00 

State  Bank,  Boston,    -  1,000,000  00 

Manhattan  Bank,  New  York,  -             -  250,000  00 

Mechanics'  Bank,       do.           -             -  750,000  00 

Bank  of  Troy,  Troy,  (New  York,)      -  100,000  00 

Bank  of  Pennsylvania,  Philadelphia,  -  1,000,000  00 

Bank  of  Columbia,  Washington,           -  200,000  00 

Farmers'  Bank  of  Alexandria,              -  200,000  00 

Planters'  Bank,  Savannah,      -            -  300,000  00 

$3,930,000  00 


1813.]  SECRETARY  OF  THE  TREASURY.  519 

G. 

LOAN  OF  SEVEN  MILLION  FIVE  HUNDRED  THOUSAND 

DOLLARS. 

The  annexed  notification,  marked  G  a.,  was  issued  on  the  30th  of  August, 
1813;  and  in  pursuance  thereof,  proposals  were  received  on  the  25th  of  Sep- 
tember, for  loaning  money  to  the  United  States,  on  a  6  per  cent.,  to  be  re- 
ceived by  the  lenders  at  various  rates,  amounting  in  the  whole  to  12,791,500 
dollars.  A  copy  of  one  of  these  proposals  is  annexed,  marked  Gb.,  the 
others  were  substantially  of  the  same  form.  After  rejecting  those  least  fa- 
vorable to  the  United  States,  and  apportioning,  by  an  equal  rule,  among  those 
that  were  accepted,  the  sum  that  was  to  be  received  on  loans  the  following 
proposals  for  the  sums  annexed  to  each  were  accepted,  by  a  letter  addressed 
to  each  of  the  persons  making  the  proposals,  in  substance,  the  same  as  that 
annexed,  marked  G  c.  viz: 

Jonathan  Smith,  of  Philadelphia,      -  -         $2,152,000  00 

Jacob  Barker,  of  New  York,              ...  1,435,00000 

Ralph  Higinbotham,  of  Baltimore,     -  1,435,000  00 

Quintin  Campbell,  of  Philadelphia,  -  -             -               468,000  00 

Fitz  G.  Halleck,  of  New  York,          -  -             -              288,000  00 

Thomas  W.  Bacot,  of  Charleston,  S.  C.  -             -              221,000  00 

William  Cochran,  of  Boston,              -  151,000  00 

George  T.  Dunbar,  of  Baltimore,       -  147,000  00 

G.  B.  Vroom,  of  New  York,               -  144,000  00 

Henry  Kuhl,  of  Philadelphia,             ...  144,000  00 

Isaac  McKim,  of  Baltimore,                -  144,000  00 

Whitehead  Fish,  of  New  York,         -  118,000  00 

John  Duer,  of  Baltimore,       -  118,000  00 

William  G.  Cochran,  of  Baltimore,    -  110,000  00 

Jacob  G.  Koch,  of  Philadelphia,         -  10S,000  00 

William  Whann,  of  Washington,       -  73,000  00 

James  Cox,  of  Baltimore,       -             -  -             -                 72,000  00 

Thomas  Gumming,  of  Augusta,  Georgia.,  -             -                 72,000  00 

The  Navy  Pension  Fund,      -  100,000  00 


7,500,000  00 


And  the  aforesaid  sum  of  §7, 500,000  was  made  payable  at  the  folio  wing- 
places,  viz: 

At  Wiscasset,  Maine,          -  75,000  00 

New  York,        -----  2,025,000  00 

New  Brunswick,  N.  J.               -             -             -  36,000  00 

Philadelphia,     -             -                           -             -  2,384,000  00 

Baltimore,         -             -             -             -             -  2,514,000  00 

Washington,      -----  73,000  00 

!  Washington,  Navy  Pension  Fund,         -             -  100,000  00 

Charleston,  S.  C.           -             -             -             -  221,000  00 

Augusta,  Georgia,          -  72,000  00 


$7,500,000  00 


520  REPORTS  OF  THE  [1813. 

Get. 

NOTICE. 

Treasury  Department, 

.August  30th,  1813. 

Whereas,  by  an  act  of  Congress,  passed  on  the  2d  day  of  August,  1813, 
the  President  of  the  United  States  is  authorized  to  borrow,  on  the  credit  of 
the  United  States,  a  sum  not  exceeding  seven  millions  five  hundred  thousand 
dollars:  And  whereas,  the  President  of  the  United  States  did,  by  an  act  or 
commission  under  his  hand,  dated  the  7th  day  of  August,  1813,  authorize 
and  empower__the  acting  Secretary  of  the  Treasury  to  borrow,  on  behalf  of 
the  United  States,  the  aforesaid  sum  of  seven  millions  five  hundred  thousand 
dollars,  pursuant  to  the  act  of  Congress  above  recited: 

PUBLIC  NOTICE  IS  THEREFORE    HEREBY  GIVEN, 

That  proposals  will  be  received  by  the  acting  Secretary  of  the  Treasury, 
until  the  twenty-fifth  day  of  September  next,  from  any  person  or  persons,  bo- 
dy or  bodies  corporate,  who  may  offer,  for  themselves  or  others,  to  loan  to  the 
United  States,  the  whole  or  any  part,  not  less  than  one  hundred  thousand 
dollars,  of  the  aforesaid  sum  of  seven  millions  five  hundred  thousand  dollars. 

The  stock  to  be  issued  for  the  money  loaned,  will  bear  an  interest  of  six 
per  cent,  per  annum,  payable  quarter  yearly,  and  the  proposals  must  dis- 
tinctly state  the  amount  of  money  offered  to  be  loaned,  and  the  rate  at  which 
the  aforesaid  stock  will  be  received  for  the  same. 

The  amount  loaned  is  to  be  paid  into  a  bank  or  banks  authorized  by  the 
Treasury,  in  instalments,  in  the  following  manner,  viz: 

One-eighth  part,  or  twelve  dollars  and  fifty  cents  on  each  hundred  dollars, 
on  the  15th  day  of  October  next. 

One-eighth  part,  on  the  15th  day  of  November  next. 

One  fourth  part,  or  twenty-five  dollars  on  each  hundred  dollars,  on  the 
15th  day  of  each  of  the  ensuing  months  of  December,  January,  and  Februa- 
ry next. 

The  proposals  must  specify  the  place  where  the  money  is  to  be  paid. 

If  proposals  differing  in  terms  from  one  another  should  be  accepted,  the 
option  will  be  allowed  to  any  persons  whose  proposals  may  be  accepted,  of 
taking  the  terms  allowed  to  any  other  person  whose  proposals  may  be  ac- 
cepted. 

No  proposals  will  be  received  for  a  sum  less  than  one  hundred  thousand 
dollars;  but  a  commission  of  one-eighth  of  one  percent,  will  be  allowed  to  any 
person  collecting  subscriptions  for  the  purpose  of  incorporating  them  in  one 
proposal,  to  the  amount  of  one  hundred  thousand  dollars  or  upwards,  pro- 
vided that  such  proposal  shall  be  accepted. 

A  commission  of  one-eighth  of  one  per  cent,  will  also  be  allowed  to  the 
Cashiers  of  the  Banks  where  the  payments  shall  be  made  ;  who  will  issue 
scrip-certificates  to  the  persons  making  the  payments,  and  will  endorse 
thereon  the  payments  of  the  several  instalments  when  made. 

On  failure  of  payment  of  any  instalment,  the  next  preceding  instalment 
to  be  forfeited. 

The  scrip-certificates  will  be  assignable  by  endorsement  and  delivery  ; 
and  will  be  funded  after  the  completion  of  the  payments,  upon  presentation 


1813.]  SECRET ARY  OF  THE  TREASURY.  52 1 

by  the  proprietor  to  the  Commissioner  of  Loans  for  the  State  where  the  pay- 
ments have  been  made. 

The  funded  stock  to  be  thus  issued,  will  be  irredeemable  till  the  31st  day 
of  December,  1525;  will  be  transferable  in  the  same  manner  as  the  other 
funded  stock  of  the  United  States;  and  will  be  charged  for  the  regular  and 
quarterly  payment  of  its  interest,  and  for  the  eventual  reimbursement  of  its 
principal,  upon  the  annual  fund  of  eight  millions  of  dollars  appropriated  for 
the  payment  of  the  principal  and  interest  of  the  debt  of  the  United  States, 
in  the  manner  pointed  out  in  the  aforesaid  act  of  the  2d  of  August,  1813. 

W.  JONES, 
Acting  Secretary  of  the  Treasury. 


Gb. 

City  of  Washington,  September  25,  1S13. 

Sir:  Having,  agreeably  to  the  terms  of  your  public  notice  of  the  30th  of 
August  last,  collected  subscriptions  for  the  purpose  of  incorporating  them  in 
one  proposal,  I  hereby  propose  to  take  of  the  loan  of  seven  millions  five 
hundred  thousand  dollars,  the  sum  of  three  million  of  dollars,  payable  at  the 
Bank  of  Pennsylvania  on  the  following  terms,  viz:  for  every  hundred  dol-> 
lars  in  six  per  cent,  stock,  I  will  give  eighty-eight  dollars  and  twenty-five 
cents  in  money,  or  for  the  privilege  of  paying  the  balance  at  any  subsequent 
instalment  after  the  first,  I  will  give  for  every  hundred  dollars  of  the  afore- 
said stock,  eighty-eight  dollars  and  fifty  cents  in  money. 
I  have  the  honor  to  be, 

With  great  respect,  sir, 

Your  obedient  servant, 

JONA:  SMITH. 
The  Hon.  the  Secretary  of  the  Treasury. 


G  c. 

Treasury  Department,  September  25, 1S13. 

Sir:  More  than  twelve  millions  and  a  half  of  dollars  were  this  day  offer- 
ed for  the  loan  of  seven  and  a  haif  millions.  The  rate  at  which  the  loan  is 
taken,  is  eighty-eight  dollars  and  twenty-five  cents  in  money  for  each  hun- 
dred dollars  in  stock.  Your  proposal  for  three  millions  of  dollars  of  the 
loan,  having  been  at  this  rate,  has  been  accepted;  but  in  consequence  of  the 
large  surplus  offered,  it  has  been  necessary  to  reduce  the  amount  allowed  to 
you  to  two  millions  one  hundred  and  fifty-two  thousand  dollars.  Upon 
completing  the  payment  of  this  sum  in  the  proportions  and  at  the  periods 
stated  in  the  public  notification  relating  to  this  loan,  of  the  30th  of  August 
last,  you  will  be  entitled  to  receive  stock  at  the  rate  above-mentioned. 


52%  REPORTS  OF  THE  [1813. 

If  you  shall  desire,  or  any  of  the  persons  in  whose  behalf  your  proposal 
was  made,  to  obtain  the  certificates  of  funded  stock  before  the  15th  of  Feb- 
ruary next,  the  day  on  which  the  last  instalment  of  the  loan  will  be  payable 
it  may  be  effected,  by  paying  on  any  day  fixed  for  the  payment  of  an  instal- 
ment, after  the  first,  all  the  subsequent  instalments;  but  interest  will  in  such 
case  be  allowed  only  as  if  each  instalment  had  been  paid  on  the  day  fixed  in 
the  public  notification  of  the  30th  of  August.  You  will  be  pleased,  on  receipt 
of  this  letter,  to  state  to  me  the  Bank  or  Banks  in  which  the  money  will  be 
paid;  and  if  more  than  one,  the  precise  sum  payable  at  each;  and  on  or  be- 
fore the  15th  of  October,  will  furnish  the  Cashier  or  Cashiers  of  such  Bank 
or  Banks,  with  the  names  of  the  persons  in  whose  behalf  your  proposal  has 
been  made,  and  the  sums  payable  by  each. 

The  commission  of  one-eighth  per  cent,  will  be  paid  from  the  Treasury, 
after  the  payment  of  the  first  instalment  on  the  15th  of  October  next. 
I  am,  respectfully,  sir, 

Your  obedient  servant, 

W.  JONES, 
Acting  Secretary  of  the  Treasury. 
Jonathan  Smith,  Esq.  Philadelphia. 


1814.]  SECRETARY  OF  THE  TREASURY.  533 


REPORT  ON  THE  FINANCES. 

DECEMBER,  1814. 


The  Secretary  of  the  Treasury,  in  obedience  to  the  act  lt  supplementary 
to  the  act,  entitled  an  act  to  establish  the  Treasury  Department,"  has  the 
honor  respectfully  to  submit  to  Congress  the  following  report  and  estimates. 

The  sums  authorized  by  Congress  to  be  expended  during  the  year  1814, 
and  for  which  appropriations  have  been  made,  are  as  follows: 

1.  For  Civil,  Diplomatic,  and  Miscellane- 
ous expenses,  -  -  -  82,245,355  59 

To  this  sum  is  to  be  added,  the  amount 
which  may  be  payable  on  the  following  ac- 
counts, viz:  1.  The  amount  of  fines,  penal- 
ties, and  forfeitures  actually  received  into  the 
Treasury,  which  is  appropriated  for  defray- 
ing the  expenses  of  courts  of  the  United 
States.  2.  The  sums  received  by  the  Collec- 
tors of  the  Customs  for  the  Marine  Hospital 
Fund  and  Privateer  Pension  Fund, which  are 
paid  into  the  Treasury  with  the  other  moneys 
derived  from  the  customs,  but  are  exclusive- 
ly applicable  to  the. two  objects  here  men- 
tioned, respectively.  3.  The  moneys  receiv- 
ed into  the  Treasury  for  the  United  States' 
moiety  of  prizes  captured  by  public  vessels, 
which  belong  exclusively  to  the  Navy  Pen- 
sion Fund.  These  items  are  contingent  and 
uncertain,  until  the  accounts  for  the  year  are 
made  up,  and  their  amount  ascertained.  As 
they  appear  among  the  receipts  into  the  Trea- 
sury, they  must  also  be  placed  among  its  ex- 
penditures. They  may  be  estimated  for  the 
year  IS  14,  at  -  -  -  200,000  00 

- .      2,445,355  59 

2.  Military  expenses,  including  the  Indian  Department, 
and  the  permanent  appropriation  of  200,000  dollars  annu- 
ally, for  arming  and  equipping  the  whole  body  of  the  mili- 
tia" of  the  United  States,         -  -  -  -  24,502,906  00 

3.  Naval  expenses,  including  200,000  dollars  for  the 
purchase  of  timber,  appropriated  by  the  act  of  March  30, 

1812,  .._..-  8,169,910  87 

67 


524  REPORTS  OF  THE  [1814. 

4.  For  the  Public  Debt,  such  sum  as  the  public  engage- 
ments may  require;  and  which,  during  the  year  1814,  may 
be  estimated  as  follows: 

Interest  on  the  public  debt  existing  previously  to  the  pre- 
sent war,        -  -  -  1,980,000  00 

Interest  on  the  debt  contracted  during  the 
present  war,  including  the  loans  of  the  pre- 
sent year  and  Treasury  Notes,  -  2,950,000  00 

Reimbursement  of  principal,  consisting  of 
the  annual  reimbursement  of  the  old  six  per 
cent,  and  deferred  stocks,  temporary  loans 
pa)^able  during  this  year,  and  Treasury  Notes 
reimbursable  -during  the  same  period,  7,572,000  00 


12,502,000  00 
But  for  these  purposes  there  had  been  ad- 
vanced from  the  Treasury  during  fhe  year 
1813,  to  sundry  Commissioners  of  Loans, 
beyond  the  demands  "upon  them  for  the  year 
1813,  and  to  the  Treasurer  of  the  United 
States  as  Agent  for  the  Commissioners  of  the 
Sinking  Fund,  about  -  -  350,000  00 


Leaving  payable  during  the  year  1814,       -  -  .    12,152,000  00 


47,270,172  46 


The  means  by  which  this  sum  was  to  be  provided,  were  the  following: 
1.  Moneys  receivable  on  account  of  the  public  revenue,  and  which  were 
estimated  asfoilows: 

From  the  Customs,              -             -  6,500,000  00 

Sales  of  Public  Lands,            -  600,000  00 

Direct  Tax  and  Internal  Duties,  3,S00,000  00 

Postage,  and  Incidental  Receipts,  50,000  00 


2.   Moneys  receivable  for  the  proceeds  of  loans,  and  for 
Treasury  Notes  to  be  issued,  as  follows  : 

Amount  payable  into  the  Treasury  during 
the  year  1814,  of  the  loan  of  seven  and  a 
half  millions,  made  under  the  act  of  August 
2,  1813,  -  -  -  3,592,665  00 

Amount  authorized  to  be  borrowed  by  the 
act  of  March  24,  1814,  -  -  25,000,000  00 

Amount  authorized  by  the  act  of  March  4, 
1814,  to  be  issued  in  Treasury  Notes,  5,000,000  00 


10,950,000  00 


33,592,665  00 


And  it  was  estimated,  that  out  of  the  balance  of  cash  re- 
maining in  the  Treasury  on  the  1st  day  of  January,  1814, 
which  amounted  to  $  5,196,4S2  00,  there  might  be  applied 
a  sum  sufficient  to  cover  the  whole  amount  of  the  authoriz- 
ed expenditures,  and  which  would  be  -  -  2,727  507  46 

$47,270,172  46 


1814.]  SECRETARY  OF  THE  TREASURY.  535 

The  accounts  of  the  Treasury  have  as  yet  been  made  up  only  for  the  two 
first  quarters  of  the  year  1814,  or  to  the  30th  of  June,  of  that  year.  The 
annexed  statement,  marked  A.,  shows  the  receipts  and  expenditures  at  the 
Treasury  for  the  fourth  quarter  of  the  year  1813,  which  have  not  before 
been  communicated  to  Congress,  and  separately,  those  of  the  two  first  quar- 
ters of  the  year  1814. 

By  this  statement,  it  appears  that  the  payments  from  the  Treasury  during 
the  first  half  of  the  present  year,  have  been- — 

For  Civil,  Diplomatic,  and  Miscellaneous  expenses,  1,444,062  60 

Military,  -  -  -  do.       -  11,210,238  00 

Naval,  -  -  -  do.       -  4,012,899  90 

Public  Debt,     -  -  -  do.  3,026,580  77 


19,693,781  27 
And  would  leave  payable  during  the  remainder  of  the- 
year,  on  those  several  accounts,  the  following  sums: 

For  Civil,  Diplomatic,   and  Miscellaneous 

expenses,       -  - "'       '  -  -  1,001,292  99 

Military  expenses         -   .  -  13,292,668  00 

Naval,  do.  -  -  4,157,010  97 

Public  Debt,  do.  .-  -  9,125,419  23 


27,576,391   19 


'47,270,172  46 


The  receipts  into  the  Treasury  during  the  first  half  of  the  present  year, 
have  been  as  follows: 

For  the  proceeds  of  the  Customs,  -  -  4,182,088  25 

Public  Lands,   (including  those  in  the  Mississippi 

Territory,  the  proceeds  of  which  are  now  payable 

to  the  State  of  Georgia,)       -  -  -  540,065  68 

Internal  Duties  and  Direct  Tax,  -  -  2,189,272  40 

Postage,  and  Incidental  Receipts,  -  -  166,744  00 

7,078,170  33 
Loan  of  seven  and  a  half  millions,  under  the  act  of  Au- 
gust 2,  1S13,  -.  -  -  3,592,665  00 

Loan  of  ten  millions,  (part  of  25  millions,) 
under  the  act  of  March  24, 1814,       -  6,087,011  00 

9,679,676  00     . 
Treasury  Notes,  issued  under  the  act  of 
February  25,  1813,  -         1,070,000  00 

Treasury  Notes,  issued  under 
the  act  of  March  4,  1814,  1,392,100  00 

2,462,100  00 

12,141,776  00 


19,219,946  33 
And  there  remained  cash  in  the  Treasury,  on  the  1st  of 

July,  1814,    -  -  -  -  -  -  4,722,639  32 

$  23,942,585  65 


52G  REPORTS  OF  THE  [1814. 

To  make  up  the  sum,  therefore,  which  will  be  wanted  to 
meet  the  expenditures  as  above  estimated,  there  must  be  ob- 
tained during  the  third  and  fourth  quarters  of  the  present 
year,  -  -  -  -  -  23,327,586  81 


47,270,172  46 


And  the  further  sum  of  1,500,000  dollars,  which  is  the  least  that  ought  at 
any  time  during  a  state  of  war,  to  be  left  in  the  Treasury, 
making  -  -  .'■*  -  -  $  24,827,586  81 

Of  this  amount  it  is  estimated  that  there  will  be  derived  from  the  various 
sources  of  existing  revenue,  the  following  sums,  viz: 

From  the  Customs,  -  -  -  2,820,000  00 

It  has  not  been  practicable  to  prepare  the  statements  of 
this  and  of  the  other  branches  of  the  revenue  in,.the  usual 
official  form,  to  be  communicated  to  Congress  at  this  time. 
Some  of  these  statements  have  been  heretofore  regularly 
given  for  periods  terminating  on  the  30th  of  September; 
and  to  preserve  the  series  unimpaired,  their  preparation  is 
postponed  until  they  can  be  made  out  terminating  with  that 
day.  They  will  hereafter  be  laid  before  Congress  in  the 
proper  form.  The  amount  of  the  custom,  house  duties 
which  accrued  during  the  year  1813,  was  7,070,000  dollars. 
During  the  two  first  quarters  of  the  present  year  they 
amounted  to  about  3,000,000  dollars;  but,  during  the  two 
last  quarters,  will  not  probably  exceed  one  million.  .  The 
amount  receivable  into  the  Treasury  during  the  year  1814^, 
from  bonds  outstanding  at  the  commencement  of  the  year, 
and  from  the  duties  accruing  and  which  will  become  payable 
during  that  year,  is  estimated  at  7,000,000  dollars;  which 
is  500,000  dollars  more  than  was  heretofore  estimated. 
Of  this  sum,  $4,182,088  25,  was  paid  during  the  first  half 
of  the  year,  and  will  leave  payable  during  the  remainder 
of  the  year,  the  sum  here  stated. 

Sales  of  Public  Lands. — The  proceeds  of  the  public  lands 
sold  in  the  Mississippi  Territory,  which  are  now  payable  to 
the  State  of  Georgia,  are  brought  into  the  Treasury  in  the 
same  manner  as  the  moneys  derived  from  the  sales  of  other 
public  lands.  As  the  amount,  when  paid  out  of  the  Trea- 
sury to  the  State  of  Georgia,  appears  among  the  public  ex- 
penditures, it  is  proper  that  these  moneys  should  be  placed 
among  the  receipts  of  the  Treasury.  Including  the  pro- 
ceeds of  the  lands  in  the  Mississippi  Territory,  the  receipts 
during  the  year  1814  are  estimated  at  900,000  dollars,  of 
which  $540,065  68,  having  been  received  during  the  two 
first  quarters  of  the  year,  there  will  be  receivable  during 
the  two  last  quarters  _'_'._,.„  360,000  00 

Internal  Duties  and  Direct  Tax. — The  receipts  into  the 
Treasury  from  these  sources  during  the  present  year,  will 
fully  equal  the  estimate  heretofore  made.  These  taxes  are 
paid  readily  and  cheerfully.     The  direct  tax  is  in  collec- 


1S14.] 


SECRETARY  OF  THE  TREASURY.  507 


tion  in  more  than  three-fourths  of  the  districts,  and  will 
shortly  be  in  the  same  state  in  all  the  districts  except  two 
or  three,  where  the  difficulty  of  obtaining  competent  per- 
sons to  act  as  Assessors  has  produced  some  delay.  In  seve- 
ral of  the  districts,  the  collection  is  already  nearly  comple- 
ted. .  The  amount  estimated  as  receivable  from  these  two 
sources,  was  3,800,000  dollars.  Of  this  sum,  there  was- 
received  prior  to  the  1st  of  July  last,  '$  2,189,272.  40,  and 
leaves  to  be  received  during  the  remainder  of  the  year  1,610.000  00 

Postage,  and  Incidental  Receipts  — These  were  esti- 
mated for  the  whole  year,  at  50,000  dollars.  Including  re- 
payments, prize  money,  and  the  arrears  of  the  former  direct 
tax  and  internal  duties,  there  was  received,  on  these  ac- 
counts, during  the  first  half  of  the  year,  $  166,744.  These 
receipts  are  so  casual  and  uncertain,  that  it  is  difficult  to 
make  any  estimate  of  their  amount.  During  the  remainder 
of  the  year,  they  may  perhaps  be  expected  to  produce  50,000  00 


Total  amount  receivable  for  revenue,  -  -  $  4,840,000  00 

Under  the  act  of  the  24th  of  March,  1814,  by  which  the  President  was 
authorized  to  borrow  twenty-five  millions  of  dollars,  a  loan  was*  opened  on 
the  2d  of  May,  for  ten  millions  of  dollars,  in  part  of  that  sum.  A  loan  for 
ten  millions  of  dollars  was  considered  as  more  likely  to  prove  successful, 
than  if  an  attempt  were  made  to  obtain  the  whole  amount  of  twent3'-five 
-millions  at  once.  The  sums  offered  for  this  loan  amounted  to  11,900,806 
dollars;  of  which  2,671,750  dollars  were  at  rates  less  than  88  per  cent.,  and 
1,183,400  dollars  at  rates  less  than  85  per  cent:  Of  the  sum  of  9,229,056 
dollars,  which  were  offered  at  88  per  cent.,  or  at  rates  more  favorable  to  the 
United  States,  five  millions  were  offered,  with  the  condition  annexed,  that 
if  terms  more  favorable  to  the  lenders  should  be  allowed  for  any  part  of  the 
twent}^-five  millions  authorized  to  be  borrowed  the  present  year,  the  same 
terms  should  be  extended  to  those  holding  the  stock  of  the  ten  million  loan. 
Taking  into  consideration  the  expectation,  then  entertained,  of  an  early  re- 
turn of  peace,  and  the  importance  of  maintaining  unimpaired  the  public  cre- 
dit, by  sustaining  the  price  of  stock  in  the  meantime;  and  also,  considering 
the  measure  was  sanctioned  by  precedent,  it  was  agreed  to  accept  the  loan 
with  that  condition.  Had  the  sum  to  which  the  condition  was  annexed  been 
rejected,  the  consequence  would  have  been  to  reduce  the  amount  obtained  to 
less  than  five  millions;  a  sum  altogether  inadequate  to  the  public  demands; 
or,  by  depressing  the  stock  to  85  per  cent.,  to  have  obtained  only  a  little 
more  than  six  millions,  which  would  still  have  been  insufficient  to  answer 
the  purposes  of  government.  Offers  were  subsequently  made  to  this  loan, 
of  sums  amounting  to  566,000  dollars,  which  were  accepted  on  the  same 
terms  as  the  original  offers,  and  augmented  the  amount  of  the  loan  which 
was  taken  to  9,795,056  dollars. 

The  papers  annexed  under  the  letter  B.,  exhibit  the  particulars  relating  to 
this  loan. 

There  was  paid  into  the  Treasury  on  account  of  the  loan  of  ten  millions, 
prior  to  the  1st  of  July,  $6,087,011;  leaving  to  be  paid  after  that  day, 
$3,708,045.  Of  this  sum,  a  failure  of  payment  on  the, days  fixed  by  the 
terms  of  the  loan,  of  about  1,900?000  dollars,  has  taken  place;  and  it  is  doubt* 


528  REPORTS  OF  THE  [1814. 

ful  whether  the  payment  will  be  effected.  No  more,  therefore,  can  be  relied 
on  towards  the  supply  necessary  for  the  third  and  fourth  quarters  of  the  year 
1814,  than  what  has  already  been  paid,  and  amounting  to  about  $1 ,800,000. 

Proposals  were  again  invited  on  the  22d  of  August,  for  a  loan  of  six  mil- 
lions of  dollars,  in  further  execution  of  the  power  contained  in  the  act  of 
the  24th  of  March,  for  borrowing  twenty-five  millions.  The  whole  amount 
offered  was  only  2,823,300  dollars,  of  which  100,000  dollars  were  at  rates 
less  than  80  per  cent.,  and  2,213,000  dollars  were  at  the  rate  of  80  dollars  in 
money  for  100  dollars  of  six  per  cent,  stock.  The  remaining  sum  of 
510,300  dollars  was  offered  at  various  rates,  from  80  to  88.  Notwithstand- 
ing the  reduced  rate  at  which  the  greater  part  of  the  above  sum  was  pro- 
posed, yet  as  the  market  price  of  stock  hardly  exceeded  80  per  cent;  as 
there  was  no-prospect  of  obtaining  the  money  on  better  terms;  and  as  it  was 
indispensable  for  the  public  service,  it  was  deemed  advisable  to  accept  the 
sums  offered  at  that  rate.  Including  the  sums  offered  at  rates  more  favorable 
to  the  United  States  than  that  here  stated,  the  whole  amount  of  the  propo- 
sals accepted  was  2,723,300  dollars;  and  a  further  sum  of  207,000  dollars 
has  been  since  accepted  at  the  same  rate;  making  the  whole  amount  taken  of 
this  loan  2,930,300  dollars.'. 

The  annexed  papers  under  the  letter  C.  relate  to  this  loan. 

Some  of  the  persons  who  originally  made  proposals  for  this  loan,  which, 
were  accepted,  have  since  given  notice  that,  they  could  not  carry  their  pro- 
posals into  execution.  The  sums  in  relation  to  which  this  failure  has  taken 
place,  amount  to  410,000  dollars;  and  there  can,  therefore,  be  relied  on  for 
the  proceeds  of  this  loan,  only  $2,520,300. 

Moneys  having  been  heretofore  obtained  by  the  United  States  on  loan  in 
Europe  upon  favorable  terms,  and  the  punctuality  and  fidelity  with  which  they 
were  repaid,  having  established  their  credit  there  on  a  firm  and  respectable 
footing;  it  was  determined,  in  consequence  of  the  difficulties  experienced  in  ob- 
taining at  home  the  sums  requisite  for  the  public  service,  to  try  the  market 
in  that  quarter.  To  effect  this  purpose,  the  requisite  powers  and  instructions 
have  been  given  for  negotiating  a  loan  for  six  millions  of  dollars  as  a  further 
part  of  the  loan  of  twenty-five  millions  authorized  by  the  act  of  the  24th  of 
March  lost;  and  in  order  to  facilitate  this  object,  6  per  cent,  stock  to  that 
amount  has  been  constituted  and  transmitted,  with  directions  for  its  sale,  if 
that  shall  be  found  the  most  advantageous  mode  for  obtaining  the  money. 
The  result,  however,  of  this  experiment,  is  not  certain;  and  the  proceeds,  in 
case  it  should  be  successful,  will  not  probably  come  into  the  Treasury  in  the 
course  of  the  present  year;  they  cannot,  therefore,  be  placed  among  the 
resources  of  tills  year.  But  as  this  sum  forms  a  part  of  that  which  was  au- 
thorized to  be  borrowed,  and  which  will  be  necessary  for  the  service  of  the 
present  year,  further'  authority  will  be  required  from  Congress  for  obtaining 
this  sum,  by  loan  or  otherwise;  in  which  case,  the  proceeds  of  the  negotiation 
undertaken  in  Europe,  will  be  applicable  to  the  service  of  the  ensuing  year. 

With  a  view  to  avoid  the  inconvenient  increase  of  stock  in  the  market,  and 
its  consequent  depreciation,  an  effort  was  made  to  obtain  temporary  loans 
from  the  banks  by  special  contracts;  but  the  attempt  was  not  attended  with 
success. 

The  amount  of  Treasury  Notes  issued  prior  to  the  1st  of  July  last,  under 
the  act  of  the  4th  of  March,  1814,  was  §1,392,100.  Those  since  issued 
amount  to$l,512,300.  The  annexed  statement  marked  E.,  shows  the  par- 
ticulars relating  to  these  notes;  and  in  the  paper  marked  D.  an  account  is 


1814.]  SECRETARY  OF  THE  TREASURY.  529 

given  of  those  Treasury  Notes  issued  under  the  act  of  the  25th  of  February, 
1S13,  which  have  not  been  heretofore  reported  to  Congress. 

There  are  now  in  circulation  near  8,000,000  of  dollars  in  Treasury  Notes; 
of  which,  during  the  fourth  quarter  of  the  present  year,  notes  for  more  than 
four  millionsof  dollars  will  become  reimbursable.  A  part  of  them  may,  perhaps, 
be  replaced  by  new  notes;  but  it  is  not  believed  that,  upon  their  present  foot- 
ing, more  than  two  millions  and  a  half  of  dollars  can  thus  be  replaced.  This 
would  still  leave  more  than  six  millions  of  dollars  of  notes  in  circulation; 
which  the  experience  of  two  years  has  shown  to  be  nearly  as  large  a  sum, 
while  the  other  circulating  paper  medium  of  the  country  remained  unembar- 
rassed, and  maintained  itself  in  the  public  confidence,  as  can,  in  their  present 
shape,  be  freely  and  easily  circulated.  Notes  of  a  smaller  denomination  than 
those  heretofore  issued  have  been  prepared,  and  will  probably,  by  passing 
into  a  more  numerous  and  extensive  class  of  the  money  transactions  of  indi- 
viduals, carry  a  greater  quantity  into  circulation:  there  having  been  already 
issued,  since  the  1st  of  July,  Treasury  Notes  amounting  to  1,500,000  dollars, 
and  it  being  estimated  that  a  further  sum  of  2,500,000  dollars  may  be  put  in 
circulation  previously  to  the  end  of  the  present  year,  the  amount  estimated 
to  be  derived  from  this  source  during  the  third  and  fourth  quarters  of  the 
year,  will  be  §4,000,000. 

The  means,  then,  for  meeting  the  demands  upon  the  Treasury  during  the 
last  half  of  the  present  year,  as  now  ascertained,  are  estimated  as  follows: 

From  the  revenue,  -  -  -  -  -         $4,840,000 

Loans  under  the  25  million  act,  viz: 

Loan  of  10  millions,        -  1,800,000 

Loan  of  6  millions,  -  -  -  -     2,520,000 


4,320,000 

9,160,000 
Treasury  Notes,  -  -  -  -  -  4,000,000 


13,160,000 
And  leave  still  to  be  obtained     -  -  11,660,000 


$24,820,000 


The  difficulties  already  experienced  in  obtaining  loans,  and  the  terms  on 
which  it  has  been  found  necessary  to  accept  them,  sufficiently  show  the  pro- 
priety of  Congress  adopting  effective  measures  for  procuring  the  sums  still 
required  for  the  service  of  the  residue  of  the  present,  as  well  as  for  that  of 
the  ensuing  year.  • 

The  suspension  of  payments  irt  specie,  by  many  of  the  most  considerable 
banks  in  the  United  States,  and  of  those  most  important  in  the  money  ope- 
rations of  the  Treasury,  has  produced,  and  will  continue  to  cause  difficulties 
and  embarrassments  in  those  operations.  The  circulating  medium  of  the 
country,  which  has  consisted  principally  of  bank  notes,  is  placed  upon  a  new 
and  uncertain  footing;  and  those  difficulties  and  embarrassments  will  extend 
in  a  greater  or  less  degree  into  the  pecuniary  operations  of  the  citizens  in 
general.  The  powers  of'  Congress,  so  far  as  they  extend,  will  be  required 
to  be  exerted  in  providing  a  remedy  for  these  evils;  and  in  placing,  if  prac- 
ticable, the  currency  of  the  country  on  a  more  uniform,  certain,  and  stable 
footing. 


530  REPORTS  OF  THE  [1814. 

If  further  reliance  must  be  had  on  loans,  it  is  respectfully  suggested,  that 
additional  inducements  should  be  offered  to  capitalists  to  advance  their 
money,  by  affording  an  ample  and  unequivocal  security  for  the  regular  pay- 
ment of  the  interest,  and  reimbursement  of  the  principal  of  such  loans  as 
may  be  obtained.  This  may  be  effected  by  establishing  an  adequate  revenue, 
and  pledging  the  same  specifically  for  that  purpose. 

It  is  also  submitted  for  the  consideration  of  Congress,  whether  Treasury 
Notes  might  not,  by  augmenting  the  rate  of  interest  they  now  bear,  and  se- 
curing its  payment,  as  well  as  their  eventual  reimbursement,  by  an  adequate 
revenue  pledged  for  that  purpose,  be  placed  on  a  footing  better  calculated 
than  at  present,  to  sustain  their  credit,  encourage  their  circulation,  and  answer 
with  more  certainty  the  purposes  of  government. 

The  estimates  for  the  service  of  the  year  IS  15  have  not  yet  been  prepared. 
Tt  is  certain,  however,  if  the  war  continues,  that  a  sum  will  be  required  at 
least  equal  to  that  demanded  for  the  present  year;  and  under  the  head  of  Public 
Debt,  an  additional  sum,  sufficient  for  the  payment  of  the  interest  on  the 
loans  made  in  the  meantime. 

By  the  plan  of  finance  which  was  adopted  at  the  commencement  of  the 
present  war,  this  additional  sum  would  be  all  that  would  be  required  to  be 
raised  by  new  taxes  during  the  year  1815,  except  what  might  be  necessary 
to  make  good  a  deficiency  in  any  of  the  existing  revenues.  According  to 
that  plan  of  finance,  the  expenditures  to  be  covered  by  the  revenue  during 
the  year  18.15,  would  be  as  follows: 

Expense  of  the  Peace  Establishment       -  -  -  §7,000,000 

Interest  on  the  debt  existing  prior  to  the  war       -       1,900,000 

Interest  on  the  debt  contracted  since  the  war, 
including  Treasury  Notes,  and  including  the  in- 
terest which  will  become  pa}^able  during  the  year 
1815,  on  debt  contracted  within  that  year.  4,600,000 


.    ■ 6,500,000 

§13,500,000 

The  revenues,  as  now  established,  are  estimated  to  produce  during  the  year 
1815,  the  following  sums,  viz: 

Customs. — While  the   whole  navy  of  the  enemy  is  disposable  for  the 

interruption  of  our  trade,  this  source  of  revenue  cannot  be  very  productive. 

From  bonds  which  will  be  outstanding  at  the  commencement  of  the  year 

1815,  and  from  the  duties,  which  will  accrue  during  that  year,  it. is  estimated 

that  there  will  be  received  into  the  Treasury     -  4,000,000 

Sales  of  public  lands  -  .   -  -  -  -   .     800,000 

Internal  Duties.— These  will  all  bring  their  full  amounts 

into  the  Treasury  during  the  year  1815,  and  will,  it  is  believed, 

produce  a  nett  sum  of  -    ;  -  -  -  -     2,700,000 

Arrears  of  direct  tax  of  1S14,  which  will  be  received  in  1815  600,000 

Postage,  and  other  incidental  receipts  •  -  -  -        100,000 


Total  amount  -  -  -    '  - '  "-  -     S,200,000 

And  leaving  to  be  provided.  -     5,300,000 


813,500,000 


iS14J 


SECRETARY  OF  THE  TREASURY.  531 


Towards  making  up  this  sum  of  5,300,000  dollars,  a  continuance  of  the 
direct  tax  will,  it  is  believed,  be  necessary;  but  at  its  present  rate  it  will  not 
produce,  nett  to  the  Treasury,  more  than  2,600,000  dollars. 

In  order  to  provide  the  remaining  sum  of  2,700,000  dollars,  as  well  as 
such  other  sums  as  may  be  deemed  requisite  for  the  objects  herein  before 
suggested,  it  will  be  for  Congress  to  consider  how  far  it  would  be  expedient 
to  increase  this  tax,  as  well  as  the  present  internal  duties;  and, also,  what  new 
objects  of  taxation  may  for  that  purpose  be  most  advantageously  resort- 
ed to. 

But  the  plan  of  finance  above  referred  to,  assumed,  as  one  of  the  grounds 
upon  which  it  depended,  that  loans  might  be  annually  obtained  during  the 
continuance  of  the  war,  for  the  amount  of  the  extraordinary  expenditures 
occasioned  by  it.  The  experience  of  the  present  year  furnishes  ground  to 
doubt  whether  this  be  practicable,  at  least  in  the  shape  in  which  loans  have 
been  hitherto  attempted.  Nor  is  it  even  certain  that  the  establishing  and 
pledging  of  revenues  adequate  to  the  punctual  payment  of  the  interest  and 
eventual  reimbursement  of  the  principal  of  the  sums  which  will  be  required 
for  the  service  of  the  year  1815,  would  enable  the  Treasury  to  obtain  them 
through  the  medium  of  loans  effected  in  the  ordinary  way. 

With  this  view  of  the  subject,  it  is  respectfully  submitted,  whether  it 
would  not  be  expedient  to  extend  the  provisions  to  be  made  for  the  service 
of  the  ensuing  year,  beyond  those  contemplated  in  this  plan  of  finance, 
hitherto  pursued  for  carrying  on  the  war;  so  as  to  provide,  by  means  other 
than  loans,  for  at  least  a  portion  of  the  extraordinary  expenditures  occasioned 
thereby.  This  would  have  a  tendency  to  ensure  public  confidence,  and  pre- 
serve and  confirm  the  public  credit. 

The  present  state  of  our  country,  growing  out  of  the  unjust  policy  of  the 
enemy,  as  well  as  the  unusual  manner  in  which  he  prosecutes  the  war,  calls 
for  new  and  extraordinary  exertions  on  the  part  of  the  nation;  and  the  means 
requisite  to  meet  the  expenditures  which  these  may  occasion,  ought  to  be 
provided. 

The  resources  of  the  nation  are  not  exhausted;  they  are  ample,  and  the 
occasion  requires  they  should  be  brought  into  full  activity. 

The  very  expenditures  which  render  necessary  the  imposition  of  addi- 
tional taxes,  will  themselves  have  increased  in  the  community  the  ability 
to  discharge  them. 

The  promptitude  and  cheerfulness  with  which  the  present  taxes  are  paid, 
afford  the  best  pledges  of  the  spirit  with  which  the  people  will  meet  such 
demands  as  the  interest  and  safety  of  the  country  may  require.  A  people 
who  have  not  only  tasted,  but  enjoyed  in  their  full  extent,  the  blessings  of 
liberty  and  independence,  for  more  than  thirty  years,  cannot  consider  any 
sacrifices  too  great,  which  are  found  indispensable  to  preserve  them  inviolate. 

Those  sacrifices,  however,  which  may  be  demanded  by  the  present  crisis 
in  our  affairs,  will  be  of  a  temporary  nature  only;  for  while  we  may  fairly 
calculate,  that,  with  the  termination  of  the  present  contest,  the  duration  of 
which  will  be  shortened  in  proportion  to  the  vigor  and  unanimity  with 
which  it  is  sustained  on  our  part,  will  cease  the  expenditures  consequent  on 
a  state  of  war,  and  render  no  longer  necessary  a  continuance  of  those  extra- 
ordinary revenues  established  to  provide  the  supplies  requisite  for  that 
object;  we  may  with  equal  confidence  rely  that  the  growing  revenue  arising 
from  the  commerce  of  a  few  prosperous  years  of  peace,  will  be  found  suffi- 
cient to  redeem  the  pledges  which  may  have  been  made  to  the  pubfic 
68 


532  REPORTS  OF  THE  [181 4, 

creditors,  and  thus  relieve  the  people  from  those  burthens  which  times  of 
danger  and  of  difficulties  rendered  indispensable. 
All  which  is  respectfully  submitted. 

a.  W.  CAMPBELL. 

Treasury  Department,  September  23,  1814. 


A. 

STATEMENT  of  Receipts  and  Payments  at  the   Treasury  of  the 
United  States,  from  the  1st  of  October  to  the  31st  of  December,  1813. 

Receipts. 

Cash  in  the  Treasury,  subject  to  warrant,  1st  October,  1813  $6,978,752  43 

Received  for  the  proceeds  of  the  customs  3,238,043  58 

Arrears  of  internal  revenues           -             -  380  68 

Fees  on  patents     -  1,470  00 

Postage  of  letters                -  35,000  00 

Nett  proceeds  of  prizes  captured   -             -  129,458  06 

Rent  of  the  United  States'  Saline                -  6,350  00 

Fines,  penalties,  and  forfeitures     -             -  1,003  75 

Sales  of  public  lands           -              -             -  263,049  06 

Repayments          -  3,810  13 


Loan  of  16,000,000,  per  act  of  8th  Febru- 
ary, 1813  -  -  -      1,511,875  00 

Loan  of  7,500,000  per  act  of 

2d  August,  1813        -  -  -      3,907,335  00 

Treasury  Notes,  per  act  of  30th 

June,  1812    -  -  101,700 

Do  per  act  of  25th  Feb.  1813     3,677,000 

3,778,700  00 


3,678,565  26 


9,197,910  00 
.9,855,227  69 


Payments. 

Civil  and  Miscellaneous  Expenses,  both  Foreign  and  Domestic. 

Civil  Department,  proper  -  -  $125,478  66 
Grants  and  miscellaneous  claims  -  -  23,552  03 
Military  pensions  -  675  24 
Light-house  establishment  -  -  7,104  15 
Marine  Hospital  establishment  -  -  12,S69  58 
Public  buildings  in  Washington,  and  furni- 
ture for  the  President's  House  -  7,000  00 
Prisoners  of  war  -  54,000  00 
Road  from  Cumberland  to  the  Ohio            -  11,880  03 


1814.]                 SECRETARY  OF  THE  TREASURY.                      533 

Prize  money         -  112,668  25 

Mint  establishment            -  4,516  41    < 

Trading  houses  with  the  Indians  -             -  1,125  00 

Ascertaining  land  titles  in  Louisiana          -  1,735  00 

Surveys  of  public  lands     -  12,176  62 

Diplomatic  department      -  19,017  91 

Relief  and  protection  of  American  seamen  31,017  50 

Treaties  with  Mediterranean  powers         -  10,000  00 


434,866   3S 


Military  Expenses,  viz: 
Military  Department         -  5,887,747  00 

Naval  Expenses,  viz: 
Naval  Department,  Marine  Corps,  &c.      -  -  -       1  24s  145  10 

Public  Debt,  viz  : 

Interest  and  charges  -  1,563,762  35 

Reimbursement  of  principal  -  -      5,524,232  60 


7,087,994  95 

Balance  in  the  Treasury,  subject  to  warrant,  31st  Dec.  1813        5,196  474  26 

$19,855,227  69 


STATEMENT  of  Receipts  and  Payments  at  the  Treasury  of  the  United 
States,  from  the  1st  of  January  to  the  30th  June,  1S14. 

Receipts. 

Cash  in  the  Treasury,  subject  to  warrant,  1st  January,  1814    $5,196,474  26 

Received  for  the  proceeds  of  the  customs        4,182,0SS  25 

Arrears  of  internal  revenues  and  direct  taxes  4,505  32 

New  internal  revenue  and  direct  tax  2,189,272  40 

Fees  on  patents     -  3,720  00 

Postage  of  letters  -  45,000  00 

Nett  proceeds  of  prizes  captured  -  -  83,261   79 

Fines,  penalties,  and  forfeitures     -  -  1,230  97 

Nett  proceeds  of  property  seized,  supposed 

to  belong  to  A.  Burr  -  -  448  00 

Sales  of  public  lands         ...         540,065  68 
Repayments  -  28,577  92 


Loan  of  seven  and  a  half  millions,  per  act 

of  2d  August,  1813    -  -  -      3,592,665  00 

Do       of  ten  millions,  per  act  of  24th 

March,  1814  -  -      6,087,011  00 


-      7,078,170  33 


534  REPORTS  OF  THE 

Treasury  Notes,  per  act  of  25th  February, 

1813  -  -     1,070,000  00 

Do         4th  March,  1814         1,392,100  00 


[1814. 


2,462,100  00 
12,141,776  00 


$24,41 6,420  59 

Payments. 

Civil  and  Miscellaneous  Expenses,  both  Foreign  and  Domestic. 

Civil  Department,  proper               -             -  $571,706  91 

Grants  and  miscellaneous  claims  -             -  144,194   99 

Military  pensions               -             -             -  47,424  27 

Light-house  establishment              -             -  66,469   12 

Marine  Hospital  establishment      -             -  24,697  89 

Furniture  for  the  President's  House          -  2,000  00 

Prisoners  of  war  -  199,000  00 

Road  from  Cumberland  to  the  Ohio             -  26,924  57 

Prize  money         -  10S,089  50 

Mint  Establishment           -             -             -'  8,125  44 

Trading  houses  with  the  Indians  -             -  8,044  86 

Ascertaining  land  titles  in  Louisiana           -  2,757  67 

Surveys  of  public  lands      -             -             -  6,167  07 

Survey  of  the  Coast  of  the  United  States    -  3,127  50 

Payment  to  Georgia  for  Mississippi  lands  96,222   94 
Bounty  to  the  owners,  &c.of  private  armed 

vessels            -              -              -              -  4,300  00 

Privateer  pension  fund      -  50,000  00 

Diplomatic  Department     -  37,149  26 

Relief  and  protection  of  American  seamen  14,015  26 

Treaties  with  Mediterranean  powers          -  8,300  00 

Contingent  expenses  of  foreign  intercourse  12,720  35 

Claims  on  France               -                          -  2,625  00 


■      1,444,062   60 

Military  Expenses,  viz: 

Military  Department         -----     11,210,23800 

Naval  Expenses,  viz: 

Naval  Department,  Marine  Corps,  &c.       -  -  -       4,012,899  90 

Public  Debt,  viz: 

Interest  and  charges  -  -  -      1,539,080  09 

Reimbursement  of  principal  -  -      1,487,500  6S 

3,026,580  77 

Balance  in  the  Treasury,  subject  to  warrant,  30th  June,  1814    4,722,639  32 

$24,416,420  59 


1814.]  SECRETARY  OF  THE  TREASURY.  £35 

B. 

NOTICE. 

Treasury  Department,  April  Ath,  1814. 

Whereas,  by  an  act  of  Congress,  passed  on  the  24th  day  of  March,  1814, 
the  President  of  the  United  States  is  authorized  to  borrow,  on  the  credit  of 
the  United  States,  a  sum  not  exceeding  twenty-five  millions  of  dollars;  and 
whereas  the  President  of  the  United  States  did,  by  an  act  or  commission, 
under  his  hand,  dated  the  26th  day  of  March,  1814,  authorize  and  empower 
the  Secretary  of  the  Treasury  to  borrow,  on  behalf  of  the  United  States,  the 
aforesaid  sum  of  twenty-five  millions  of  dollars,  or  any  part  thereof,  pursu- 
ant to  the  act  of  Congress  above  recited: 

Notice  is  therefore  hereby  given, 

That  proposals  will  be  received,  by  the  Secretary  of  the  Treasury,  until 
the  2d  day  of  May  next,  from  any  person  or  persons,  body  or  bodies  corpo- 
rate, who  may  offer,  for  themselves  or  others,  to  loan  to  the  United  States, 
on  account  and  in  part  of  the  aforesaid  sum  of  twenty-five  millions  of  dollars, 
the  sum  of  ten  millions  of  dollars,  or  any  part  thereof,  not  less  than  twenty- 
five  thousand  dollars. 

The  stock  to  be  issued  for  the  money  loaned,  will  bear  an  interest  of  six 
per  cent,  per  annum,  payable  quarter  yearly ;  and  the  proposals  must  distinctly 
state  the  amount  of  money  offered  to  be  loaned,  and  the  rate  at  which  the 
aforesaid  stock  will  be  received  for  the  same. 

The  amount  loaned  is  to  be  paid  into  a  bank  or  banks  authorized  by  the 
Treasury,  in  instalments,  in  the  following  manner,  viz: 

One-fourth  part,  or  twenty-five  dollars  on  each  hundred  dollars,  on  the 
twenty-fifth  day  of  May  next. 

And  one-fourth  part  on  the  twenty-fifth  day  of  each  of  the  ensuing  months 
of  June,  July,  and  August  next. 

On  the  day  fixed  for  the  payment  of  any  instalment  after  the  first,  all  the 
remaining  instalments  may  be  paid.    . 

The  sum  loaned  is  to  be  paid  into  such  bank  or  banks  as  may  be  mutually 
convenient  to  the  lender  and  to  the  government,  in  the  State  where  the  lender 
resides,  if  desired  by  him.  The  proposals  must  state  the  bank  or  banks  into 
which  the  lender  may  desire  to  make  the  payments. 

If  proposals,  differing  in  terms  from  one  another,  should  be  accepted,  the 
option  will  be  allowed  to  any  persons  whose  proposals  may  be  accepted,  of 
taking  the  terms  allowed  to  any  other  person  whose  proposals  may  be  ac- 
cepted. 

No  proposals  will  be  received  for  a  sum  less  than  twenty-five  thousand 
dollars;  but  a  commission  of  one-fourth  of  one  per  cent,  will  be  allowed  to 
any  person  collecting  subscriptions  for  the  purpose  of  incorporating  them  in 
one  proposal,  to  the  amount  of  twenty -five  thousand  dollars,  or  upwards, 
provided  such  proposal  shall  be  accepted. 

If  proposals  shall  be  made,  amounting  together  to  a  greater  sum  than  that 
required,  the  preference  will,  on  equal  terms,  be  given  to  those  made  by  per- 
sons who  were  subscribers  to  the  loan  of  eleven  millions,  in  the  year  1812. 
On  failure  of  payment  of  any  instalment,  the  next  preceding  instalment  to 
be  forfeited. 


536  REPORTS  OF  THE  [1814. 

Scrip-certificates  will  be  issued  by  the  cashiers  of  the  banks  where  the 
payments  shall  be  made,  to  the  persons  making  the  payments;  and  the  said 
cashiers  will  endorse  on  these  certificates  the  payments  of  the  several  instal- 
ments, when  made. 

The  scrip-certificates  will  be  assignable  by  endorsement  and  delivery;  and 
will  be  funded  after  the  completion  of  the  payments,  upon  presentation  by  the 
proprietor,  to  the  Commissioner  of  Loans  for  the  State  where  the  payments 
have  been  made. 

The  funded  stock  to  be  thus  issued,  will  be  irredeemable  till  the  31st  day 
of  December,  1826;  will  be  transferable  in  the  same  manner  as  the  other 
funded  stock  of  the  United  States;  and  will  be  charged  for  the  regular  and 
quarterly  payment  of  its  interest,  and  for  the  ultimate  reimbursement  of  its 
principal,  uponThe  annual  fund  of  eight  millions  of  dollars,  appropriated  for 
the  payment  of  the  principal  and  interest  of  the  debt  of  the  United  States,  in 
the  manner  pointed  out  in  the  aforesaid  act  of  the  24th  of  March,  1814. 

GEO.  W.  CAMPBELL, 

Secretary  of  the  Treasury. 


Ba. 


Washington,  4th  Mo.  30th,  1814. 

Respected  Friend:  I  will  loan  to  the  government  of  the  United  States 
five  millions  of  dollars,  receiving  one  hundred  dollars  six  per  cent,  stock  for 
each  eighty-eight  dollars  paid;  and  will  pay  the  money  in  the  proportions, 
and  at  the  periods,  mentioned  in  thy  advertisement  of  the  4th  April,  to 
their  credit,  in  such  banks  in  the  United  States  as  may  be  agreeable  to  thee. 
On  the  payment  of  each  instalment,  and  satisfactory  assurances  for  the  pay- 
ment of  the  others,  funded  stock  to  be  issued.  It  being  understood  and 
agreed,  that,  if  terms  more  favorable  to  the  loaners  be  allowed  for  any  part  of 
the  twenty-five  millions  authorized  to  be  borrowed  the  present  year,  the  same 
terms  are  to  be  extended  to  this  contract. 

The  commission  of  one  quarter  of  one  per  cent,  mentioned  in  thy  adver- 
tisement, to  be  allowed  me  on  the  amount  loaned. 

With  great  respect  and  esteem,  I  am 
Thy  assured  friend, 

JACOB  BARKER. 
The  Hon.  George' W.  Campbell, 

Secretary  of  the  Treasury. 


B  b. 

Treasury  Department,  May  2dy  1814. 

Sir:  The  terms  upon  which  the  loan  has  been  concluded,  are  as  follows, 
viz: 

Eighty-eight  dollars  in  money  for  each  hundred  dollars  in  stock;  and  the 
United  States  engage,  if  any  part  of  the  sum  of  twenty-five  millions  of  dol- 
lars, authorized  to  be  borrowed  by  the  act  of  the  24th  of  March,  1814,  is  bor- 


1814.] 


SECRETARY  OF  THE  TREASURY. 


537 


rowed  upon  terms  more  favorable  to  the  lenders,  the  benefit  of  the  same 
terms  shall  be  extended  to  the  persons  who  may  then  hold  the  stock,  or  any 
part  of  it,  issued  for  the  present  loan  often  millions. 

Your  proposal  of  the  30th  of  April,  1814,  for  $5,000,000  of  the  loan,  having 
been  at  the  above  rate,  or  at  a  rate  more  favorable  than  the  above  to  the  United 
States,  has  been  accepted;  and  you  will  please  to  pay,  or  cause  to  be  paid,  on 
the  25th  day  of  the  present  month,  into  the  bank  or  banks  you  have  named, 
or  into  such  as  you  shall  name  to  the  Secretary  of  the  Treasury,  on  the  re- 
ceipt of  this  letter,  twenty -five  per  cent.,  or  one-fourth  part  of  the  sum  above 
stated,  pursuant  to  the  notification  from  this  department,  of  the  4th  of  April 
last,  and  the  remaining  instalments  on  the  days  fixed  in  the  said  notification. 
You  will  be  pleased,  afso,  on  or  before  the  25th  of  May,  to  furnish  the  cashier 
or  cashiers  of  the  bank  or  banks  where  the  payments  under  your  proposal 
are  to  be  made,  with  the  names  of  the  persons  in  whose  behalf  the  proposal 
has  been  made,  and  the  sums  payable  by  each. 

The  commission  of  one-fourth  of  one  per  cent,  will  be  paid  from  the  Trea- 
sury after  the  payment  of  the  first  instalment,  on  the  25th  day  of  the  present 
month. 

I  am,  respectfully,  Sir, 

Your  obedient  servant, 

G.  W.  CAMPBELL, 

Secretary  of  the  Treasury. 
Jacob  Barker,  Esq.  New  York. 

A  similar  letter  was  addressed  to  the  persons  under-mentioned,  who  made 
proposals  for  the  sums  set  against  their  names  respectively: 


Peleg  Tallman, 

Bath,  Maine, 

$25,000 

Levi  Cutter, 

Portland,  do 

94,000 

John  Woodman, 

do 

50,000 

Henry  S.  Langdon, 
John  W.  Treadwell, 

Portsmouth,  New  Hampshire, 
Salem,  Massachusetts, 

40,000 
416,156 

Thomas  Perkins, 

do 

25,000 

William  Gray, 
Samuel  Dana, 
Jesse  Putnam, 
Amos  Binney, 

Boston, 
do 
do 
do 

197,000 
25,000 
67,900 
35,000 

Nathan  Waterman,  Jr. 

Providence,  Rhode  Island, 

35,300 

James  D'Wolf, 

Bristol, 

100,000 

John  R.  Shearman, 
Elisha  Tracy, 

Newport, 

Norwich,  Connecticut, 

35,000 
30,000 

Michael  Shepard, 
Abraham  Bishop, 

Hartford,         do 
New  Haven,  do 

25,000 
25,000 

John  Tayler, 
Alamon  Douglas, 

Albany, 
Troy, 

150,000 
50,000 

Smith  and  Nicoll, 

New  York, 

80,000 

Harmon  Hendricks, 

do 

42,000 

G.  B.  Vroom, 
Samuel  Flewwelling, 

do 
do 

500,000 
257,300 

Jacob  Barker, 

do 

5,000,000 

Whitehead  Fish, 

do 

250,000 

Guy  Bryan, 
Thomas  Newman, 

Philadelphia, 
do 

50,000 
108,000 

»3S 


Reports  of  the 


[I8i4. 


Samuel  Carswell, 
Paul  Beck,  Junior, 
Wm.  Patterson  &  Sons 
George  T.  Dunbar, 
James  Cox, 
Dennis  A.  Smith, 
Samuel  Eliot,  Junior, 
Alexander  Kerr, 


Philadelphia, 
do 
Baltimore, 
do 
do 
do 
Washington, 
do 


W.  Jones,  (for  Navy  and  Privateer  Pension  Funds)  do 


William  Whann, 
Anthony  C.  Cazenove, 
Charles  B.  Cochran T 
David  Alexander, 
John  Lukins, 
Thomas  W.  Bacot, 
James  Taylor, 


Washington, 

Alexandria, 

Charleston,  South  Carolina, 

do  do 

do  do 

do  do 

Newport,  Kentucky, 


28,000 
50,000 
50,000 

191,000 
71,900 

200,000 

100,000 
33,000 

200,000 
42,500 
30,000 

250,000 
60,000 
70,000 

115,000 
25,000 

$9,229,056 


There  was  subsequently  offered,  and  accepted,  proposals  by  the  under- 
mentioned persons,  for  the  following  sums,  viz: 


William  Whann, 

Washington, 

190,000 

Do 

do 

200,000 

Robert  C.  Jennings, 

Richmond,  Virginia, 

176,000 

$566,000 


C. 
NOTICE. 

Treasury  Department,  July  25,  1814. 

Notice  is  hereby  given,  That  proposals  will  be  received  by  the  Secretary 
of  the  Treasury,  until  the  22d  day  of  August  next,  for  loaning  to  the  United 
States  the  sum  of  six  millions  of  dollars,  or  any  part  thereof,  not  less 
than  twenty-five  thousand  dollars,  the  same  being  in  part  of  the  sum  of  twen- 
ty-five millions  of  dollars  authorized  to  be  borrowed  by  the  act  of  Congress 
of  the  24th  day  of  March  last 

The  stock  to  be  issued  for  the  money  loaned,  will  bear  an  interest  of  six 
per  cent,  per  annum,  payable  quarter  yearly;  and  the  proposals  must  dis- 
tinctly state  the  amount  of  money  offered  to  be  loaned,  and  the  rate  at  which 
the  aforesaid  stock  will  be  received  for  the  same. 

The  amount  loaned  is  to  be  paid  into  a  bank  or  banks  authorized  by  the 
Treasury,  in  instalments  in  the  following  manner,  viz: 

One-fourth  part,  or  twenty-five  dollars  on  each  hundred  dollars,  on  the 
tenth  day  of  September  next. 

And  one-fourth  part  on  the  tenth  day  of  each  of  the  ensuing  months  of 
October,  November,  and  December  next. 


1814.]  SECRETARY  OF  THE  TREASURY.  53$ 

On  the  day  fixed  for  Ihe  payment  of  the  first,  or  any  other  instalment,  all 
the  remaining  instalments  may  be  paid,  at  the  option  of  the  lender. 

The  proposals  must  state  the  bank  or  banks  into  which  the  lender  may  de- 
sire to  make  his  payments;  and  he  will  be  allowed  to  make  them  according 
to  his  wishes,  thus  expressed,  in  all  cases  where  the  convenience  of  the  Trea- 
sury will  permit. 

The  same  terms  will  be  allowed  to  all  whose  proposals  are  accepted. 

No  proposals  will  be  received  for  a  sum  less  than  twenty-five  thousand 
dollars;  but  a  commission  of  one-fourth  of  one  per  cent,  will  be  allowed  to  any 
person  collecting  subscriptions  for  the  purpose  of  incorporating  them  in  one 
proposal  to  the  amount  of  twenty-five  thousand  dollars,  or  upwards,  provided 
such  proposal  shall  be  accepted. 

On  failure  of  payment  of  any  instalment,  the  next  preceding  instalment  to 
to  be  forfeited. 

All  the  instalments  must  be  paid  at  the  same  bank  as  that  at  which  the  first 
instalment  shall  be  paid. 

Scrip-certificates  will  be  issued  by  the  cashiers  of  the  banks  where  the 
payments  shall  be  made,  to  the  persons  making  the  payments;  and  the  said 
cashiers  will  endorse  on  these  certificates  the  payments  of  the  several  instal- 
ments when  made. 

The  scrip  certificates  will  be  assignable  by  endorsement  and  delivery,  and 
will  be  funded  after  the  completion  of  the  payments,  upon  presentation  to 
the  Commissioner  of  Loans,  for  the  State  where  the  payments  have  been 
made. 

Certificates  of  funded  stock  will  also  be  issued,  if  the  holders  of  scrip-cer- 
tificates shall  desire  it,  for  the  amount  of  any  instalment  paid,  after  the  pay- 
ment of  the  next  succeeding  instalment. 

The  funded  stock  to  be  thus  issued,  will  be  irredeemable  till  after  the  31st 
day  of  December,  1826;  will  be  transferable  in  the  same  manner  as  the  other 
funded  stock  of  the  United  States;  and  will  be  charged  for  the  regular  and 
quarterly  payment  of  its  interest,  and  for  the  ultimate  reimbursement  of  its 
principal,  upon  the  annual  fund  of  eight  millions  of  dollars  appropriated  for 
the  payment  of  the  principal  and  interest  of  the  debt  of  the  United  States,  in 
the  manner  pointed  out  in  the  aforesaid  act  of  the  24th  of  March,  1814. 

G.  W.  CAMPBELL, 
Secretary  of  the  Treasury, 


Ca. 

Baltimore,  August  22d,  1814. 

Sir:  I  will  take  eighteen  hundred  thousand  dollars  of  the  six  millions 
loan,  at  the  rate  of  eighty  per  cent.  The  periods  of  payment  to  be  in  con- 
formity with  your  advertisement  for  proposals;  and  the  banks  into  which 
the  payments  shall  be  made,  are  the  Bank  of  Pennsylvania  and  the  Me- 
chanics' Bank  of  Baltimore. 

I  am,  Sir,  with  great  respect, 

Your  obedient  servant, 

D.  A.  SMITH. 
G.  W.  Campbell,  Esq. 

Secretary  of  the  Treasury. 
60 


540  REPORTS  OF  THE  [1814. 

Cb. 

Treasury  Department,  August  3\st,  1814. 

Sir:  That  part  of  the  loan  of  six  millions  of  dollars  for  which  the  propo- 
sals were  accepted,  has  been  taken  at  the  rate  of  eighty  dollars,  in  money, 

for  one  hundred  dollars  in  stock.  Your  proposal  for dollars  being 

at  that  rate,  or  at  one  more  favorable  for  the  United  States,  has  been  accept- 
ed, and  you  will  be  pleased  to  make  your  payments  into  the  bank  or  banks 
specified  in  your  proposal,  in  the  manner,  and  at  the  times  stated  in  the 
public  notification.  But  as  some  delay,  the  cause  of  which  is  doubtless 
known  to  you,  has  unavoidably  taken  place  in  advising  you  of  the  acceptance 
of  your  proposal^  the  first  payment  may,  if  your  convenience  shall  require  it, 
be  made  on  the  20th  instead  of  the  10th  of  September,  as  required  by  the 
public  notification.  This,  however,  will  not  affect  the  subsequent  instal- 
ments, which  are,  nevertheless,  to  be  paid  on  the  days  already  fixed,  viz: 
the  10th  day  of  the  months  of  October,  November,  and  December. 

The  same  causes  which  have  occasioned  a  delay  in  advising  you  of  the  ac- 
ceptance of  your  proposal,  will  perhaps  render  it  impossible  to  place  the 
scrip-certificates  in  the  hands  of  the  cashiers  of  the  banks  where  the  pay- 
ments are  to  be  made,  by  the  time  at  which  the  first  instalment  will  be  pay- 
able. If  this  should  be  the  case,  you  will  please  to  receive  from  the  cashier 
his  receipt  for  the  amount  which  you  may  pay,  to  be  subsequently  exchanged 
for  a  scrip-certificate,  when  those  papers  shall  be  ready  for  delivery. 
I  am,  respectfully,  Sir, 

Your  obedient  servant, 

G.  W.   CAMPBELL, 
Secretary  of  the  Treasury. 

The  above  letter  was  addressed  to  the  following  persons,  who  made  pro- 
posals for  the  sums  affixed  to  their  names  respectively,  viz: 

William  Rice,            Portsmouth,  New  Hampshire,  $  43,000 

Henry  S.   Langdon,                     do  35,000 

Amasa  Stetson,          Boston,  37,000 

Jesse  Putnam,                  do  15,000 

Nathan  Waterman,  Jr.  Providence,  Rhode  Island,  10,000 

John  S.  Shearman,    Newport,                    do  25,000 

John  Savage,              Philadelphia,  240,000 

William  W.  Smith,         do  100,000 

William  Patterson  and  Sons,  Baltimore,  70,000 

Dennis  A.  Smith,                          do  1,SOO,000 

James  L.  Hawkins,                       do  15,000 

John  P. Van  Ness,  and  others,  Washington,  201,000 

David  English,                          Georgetown,  35,000 

John  Lukcns,                             Charleston,  47,300 

George  M.  Deadcrick,             Nashville,  50,000 

$2,723,300 


1814.] 


SECRETARY  OF  THE  TREASURY. 


541 


There  has  been  subsequently  offered,  and  accepted,  proposals  from  the  un- 
der-mentioned persons,  for  the  following  sums,  viz: 

George  T.  Dunbar,  Baltimore,  120,000 

Clement  Smith,  Georgetown,  87,000 


$207,000 


Of  the  persons  who  originally  made  proposals,  the  following  have  given 
notice  that  they  could  not  carry  them  into  effect: 

John  Savage,  Philadelphia,  $240,000 

William  W.  Smith,  do  100,000 

William  Patterson  and  Sons,  Baltimore,  70,000 


8410,000 


D. 


STATEMENT  of  the  amount  of  Treasury  Notes  issued  during  the 
first  quarter  of  the  year  1814,  under  the  act  of  the  25th  of  February, 
1813. 


Reimbursable 

AT 

: -   :         3 

Total. 

Boston. 

New  York. 

Philadel- 
phia. 

Dollars. 

1815,  January  1, 
«       11, 
"        21, 
February  1, 
«       11, 
«        21, 

100,000 
220,000 

400,000 
100,000 

40,000 

50,000 

100,000 
60,000 

450,000 
100,000 
100,000 
320,000 
40,000 
60,000 

320,000 

540,000 

210,000 

1,070,000 

542 


REPORTS  OF  THE 


[1814. 


E. 


STATEMENT  of  the  amount  of  Treasury  Notes  issued  during  the  se- 
cond quarter  of  the  year  1814,  under  the  act  of theAth  of  March,  1814. 


Reimbursable  at 

When 

Total. 

reimDursable. 

Dollars. 

New 
York. 

Philadel- 
phia. 

Balti- 
more. 

Wash- 
ington. 

Savanah. 

1815 

March  11, 

150,000 

- 

- 

- 

- 

150,000 

April  1, 

- 

- 

- 

- 

211,000 

211,000 

"    11, 

- 

- 

- 

56,000 

- 

56,000 

"     21, 

125,000 

5,500 

- 

144,000 

- 

274,500 

May  1, 

- 

1,000 

- 

50,000 

75,000 

126,000 

"    11, 

74,700 

145,000 

- 

- 

- 

219,700 

"    21, 

- 

29,500 

- 

100,000 

- 

129,500 

June  1, 

- 

6,200 

100,000 

- 

- 

106,200 

"    H3 

- 

24,500 

- 

25,000 

- 

49,500 

"    21, 

25,000 

19,700 

- 

25,000 

- 

69,700 

374,700 

231,400 

100,000 

400,000    286,000 

1,392,100 

1814.]  SECRETARY  OF  THE  TREASURY.  543 


Treasury  Department,  February  "id,  1815. 

Sir:  In  the  report  made  to  Congress  from  this  Department,  on  the  23d 
day  of  September  last,  it  was  stated,  that  the  papers  exhibiting  a  view  of 
the  revenues  of  the  United  States,  not  having  been,  at  that  time,  prepared, 
owing  to  the  early  meeting  of  Congress,  would  be  laid  before  that  body  at 
a  subsequent  day. 

I  have  now,  therefore,  the  honor  to  transmit  two  statements,  marked  A, 
and  B.  showing  the  amount  of  duties  which  accrued  on  merchandise  im- 
ported, on  the  tonnage  of  vessels,  passports  and  clearances,  during  the  years 
1812  and  1813,  and  the  particular  articles  of  merchandise  subject  to  duty, 
imported  in  the  year  1813;  and  two  statements  marked  C.  and  C  a.  showing 
the  quantity  of  public  lands  sold,  and  the  receipts  therefor,  in  the  State  of 
Ohio,  Indiana,  and  Illinois  Territories,  and  in  the  Mississippi  Territory,, 
during  the  year  ending  on  the  30th  of  September,  2814;  the  whole  pre- 
pared in  the  form  in  which  these  statements  have  usually  been  presented, 
in  the  annual  report  on  the  state  of  the  finances  made  to  Congress,  from  this 
Department. 

I  have  the  honor  to  be, 

Very  respectfully,  Sir, 

Your  most  obedient  servant, 

A.  J.  DALLAS. 

The  Hon.  the  President  of  the  Senate. 


544 


REPORTS  OF  THE 


[1814. 


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1814.] 


SECRETARY  OF  THE  TREASURY. 


145 


B. 

A  STATEMENT  exhibiting  the  value  and  quantities,  respectively,  of 
Merchandise,  on  which  duties  actually  accrued  during  the  year  1813, 
[consisting  of  the  difference  between  articles  paying  duties,  imported, 
and  those  entitled  to  drawback,  re-exported^)  and,  also,  of  the  nett  re- 
venue which  accrued,  during  that  year,  from  duties  on  Merchandise, 
Tonnage,  Passports,  and  Clearances* 


Goods  paying  duties  ad  valorem. 

23,928  10  dollars,                at       12£  per  cent.,            -         $2,99101 

5,825,316  54       do                     at       25         do                      -     1,456,329 

13 

470  87       do                     at       15         do                      -                  70 

63 

1,095,287  75       do                     at       30         do                      -         328,586 

33 

30,116  06      do                    at      40        do                     -          12,043 

35 

6,975,119  32 

a  Additional  duty,                     at         2  J       do                      -         174,377 

59 

1,974,398 

04 

b  Spirits,        -         1,017,608  galls,  at  60.1  average  per  cent.     611,913 

64 

c  Sugar,         -      31,364,276   lbs.    at    5.2      do           do         1,619,565 

02 

d  Wines,        -            604,029  galls,  at  56.2      do           do            339,521 

15 

e  Teas,          -            524,888   lbs.    at  43.5      do           do            228,338 

12 

/  Coffee,       -         8,202,072   lbs.    at  10.        do           do            860,253 

10 

Molasses,    -         3,220,710  galls,  at  10.        do           do            322,071 

00 

g  All  other  articles,                .'....     429,70451 

6,385,764 

58 

Deduct  duties  refunded,  after  deducting  therefrom  duties  col- 

lected on  merchandise,  the  particulars  of  which  could  not  be 

ascertained,  and  difference  in  calculation,                 -             -      125,898 

68 

6,259,865  90 
21,017  73 

3^  per  cent,  retained  on  drawback,      - 

Extra  duty  of  10  per  cent,  on  merchandise  imported  in  for.  ves.         2,513 

48 

Do     do       15£     do                 do                     do             do              483,630 

06 

486,143  54 

Nett  amount  of  duties  on  merchandise,           - 

6,767,027  17 

Duties  on  tonnage,       ------      259,002 

87 

Light  money,   -------        56,635 

13 

315,638  00 
3,640  00 

Duties  on  passports  and  clearances,     - 

Gross  revenue,  per  statement  A.,        -            - 

7,086,305  17 

Deduct  expenses  on  collection,            - 

410,483  94 

Nett  revenue,   -           -           -          .  - 

$6,675,821  23 

546 


REPORTS  OF  THE 

Explanatory  Statements  and  Notes. 


[1814. 


a  Additional  duty — 

1\  per  cent,  on  6,975,119  32  dollars,  -     174,377  98 

Deduct  excess  of  exportation,  15  35      do  -  39 


3|  per  cent,  retained  o 
Extra  duty  of  10  per  c> 

n  drawback 

strt.  on  merchandise  in 

1st  proof,               2 
3d     do                 97 
2d     do        163,457 
3d     do       209,533 
4th   do       644,635 
5th   do              173 
6th  do              300 

nported  in  f 

gallons,  at 
do        at 
do        at 
do        at 
do        at 
do        at 
do        at 

do 

do        at 

do 

2^  cents, 
5     cents,- 

2$  cents, 

5  cents, 

3     cents, 

6  cents, 

3     cents, 
6     cents, 

oreign  vessels, 
Dollars, 

56  cents, 
62  cents, 
50  cents, 
56  cents, 
64  cents, 
76  cents, 
92  cents, 

32  cents, 

-      $  278  13 
1,457,331  15 

174,377  59 

78  76 

2,496  01 

176,952  36 

b  Spirits — 

From  Grain, 
Do       do  — 
Do    other  materials, 
Do             do 
Do             do 
Do             do 
Do             do 

1  12 

,  60  14 

81,728  50 

117,338  48 

412,566  40 

131  48 

276  00 

Deduct  exported, 

1,018,197 
.589 

612,102  12 
188  48 

1,017,608 

$611,913  64 

c  Sugar — 

Brown,  &c.  Imported, 
Do                 do 

11,125  lbs. 
29,146,623   do 

at 
at 

at 
at 

at 
at 

at 
at 

29,157,748 

1,457,609  28 

- 

278  15 

47,244  20 

Brown,  &c.  Exported, 
Do                 do 

11,126   do 
944,884  do 

956,010  lbs. 

47,522  35 

.  ; 

2,731  62 
322,518  90 

Nett, 

28,201,738  do 

$  1,410,086  93 

White,  clayed,  hd.  Impo: 
Do          do             do 

rted,    91,054  lbs. 
5,375,315  do 

5,466,369  lbs. 

325,250  52 

- 

22,457  43 
93,315  00 

White,  clayed,  Stc.  Expor 
Do          do             do 

•ted,  748,581   do 
1,555,250   do 

2,293,831  lbs. 

115,772  43 

1,410,086  93 
209,478  09 

Nett, 

3,162,538  do 

$209,478  09 

Brown,  clayed,  &c.  Nett, 
Wrhite,         do             do 

28,201,738  lbs. 
3,162,538   do 

31,364,276  lbs. 

$  1,619,565  02 

1814.]  SECRETARY  OF  THE  TREASURY. 

Explanatory  Statements  and  Notes — Continued. 


547 


d  Wines — 

Malmsey,  Madeira,  &c. 

. 

10,493 

gallons, 

at 

116 

cents, 

„ 

$  12,171 

88- 

Other  Madeira,  &c. 

. 

1,881 

do 

at 

100 

cents, 

. 

1,881 

00 

Burgundy,  Champaig 

n,  &c. 

- 

1,701 

do 

at 

90 

cents, 

. 

1,530 

90 

Sherrv  and  St.  Lucar 

,  &c. 

- 

78,746 

do 

at 

80 

cents, 

- 

62,996 

80 

Claret,  in  bottles,  &c 

. 

22,048 

do 

at 

70 

cents, 

- 

15,433 

60 

Lisbon,  Oporto,  &c. 

- 

23,784 

do 

at 

60 

cents, 

. 

14,270 

40 

Teneriffe,  Fayal,  Mai 

aga,  8cc. 

155,141 

do 

at 

56 

cents, 

- 

86,878 

96 

All  other,  not  specifii 

;d, 

317,550 
611,344 

do 
gallons, 

al 

46 

cents, 

146,073 

00 

§341,236  54 

Deduct  exportations, 

viz: 

Burgundy,         7  galls. 

at  45 

cents, 

. 

. 

-       $3  15 

Sherry,            28     do 

at  40 

cents, 

. 

. 

11 

20 

Claret,           222     do 

at  35 

cents, 

. 

.- 

77  70 

All  other,  7,058     do 

at  23 

cents, 

7,315 
604,029 

gallons, 
do 

-  1,623 

34 

1,715 

39 

. 

$339,521 

15 

e  Teas — 

Souchong,      - 
Hyson, 

Other  green,  - 

Extra  duty  on  importations  from  other 
places  than  India, 


Deduct — 

Exported  Bohea,  151  lbs.  at  24  cents, 
Do       Hyson,  311   do    at  32  cents, 


118,743  pounds,  at  36  cents, 

92,339       do        at  64  cents, 

314,268       do        at  40  cents, 


525,350  pounds, 


36  24 
99  52 


462  pounds, 
524,888  do 


42,747  48 

59,096  96- 

125,707  20 

922  24 

§228,473  88 


135  76 


/  Coffee- 


9,002,990  pounds,  at  10  cents, 
Deduct  exported,         800.918      do        at    5  cents, 

8,202,072  pounds, 


$  228,338  12 


900,299  00 
40,045  90 


$860,253  10 


70 


54S 


REPORTS  OF  THE  [1814. 

Explanatory  Statements  and  Notes — Continued. 


All  other  articles. 


Spirits,  domestic  distilled  gallons 

do             do  do 

Beer,  ale,  and  porter.  do 

Cocoa             -             -  '  -     pounds 

Chocolate  do 

Do             -             -  do 

Sugar,  candy          ,  , -  -           do 

loaf  do 

other,  refined  and  lump        do  ' 

Almonds  do 

Fruits — Currants  do 

Prunes  and  plums  -           do 

Figs               -  -•           do 

Raisins,  muscatel  -           do 

do        other  -           do 

Candles,  tallow          -  -           do 

wax,  and  spermaceti  do 

Cheese           ...  do 

Soap  do 

Do  do 

Tallow    "       -             -  do 

Spice — Mace              -  -           do 

Nutmegs      -  -           do 

Cinnamon  do 

Cloves  do 

Pepper        -  -           do 

do            -  -           do 

Pimento  do 

Cassia          -  -           do 

do  do 

Tobacco  do 

Snuff  do 

Indigo  do 

Cotton  do 

Do  do 

Powder,  hair             -  -           do 

gun  do 

do  do 

Starch  do 

Glue               -  do 

Pewter  plates  and  dishes  -           do 

Iron,  anchors,  and  sheet  -           do 

slit  and  hoop       -  -           do 

Nails  do 

Spikes            -             -    '  do 

Quicksilver               -  -          do 

Paints — Ochre,  in  oil  -           do 

Do  dry,  yellow  -           do 

Spanish  brown  -           do 

White  and  red  lead  do 

Lead  do 


Quantities. 


Excess  of 
importation 
over  ex- 
portation. 


134 

32 

11,633 

109,873 

34 

562 

473 

1,426 

351 

301,461 

40,392 

92,347 

75,607 

956,854 

738,692 

29,163 

725 

12,089 


350,497 
254 
632 
157 

523,750 

48,275 
42,240 

2,925 

427 

219.042 

22,356 

735,705 

110 

557 

196,206 

1,665 

43,985 

38 

226,865 

183,739 

206,771 

23,115 

2,744 

1,458 

123,328 

26,698 

411,275 

68,320 


Excess  of 
exporta- 
tion over 
importa- 
tion. 


48,279 
22,763 


28,537 
5,841 

9,806 


Rate  of 
duty. 

Cents. 


Excess  of 
duties  over 
drawback. 


7 

14 

16 

4 

3 

6 

23 

18 

13 

4 

4 

4 

4 

4 

3 

4 

12 

14 

4 

2 

3 

250 

100 

40 

40 

12; 

6 


4 
12 
20 
50 


3 
2 
4 
2 
12 


9  38 

4  48 

1,861  28 

4,394  72 

1  02 

33  72 

108  79 

256  68 

45  63 

12,058  44 

1,615  68 

3,693  88 

3,024  28 

38,274  16 

22,16076 

1,166  52 

87  00 

1,692  46 


10,514  91 

635  00 

632  00 

62  80 


62,499  54 
3,862  00 
2,986  96 

35100 

85  40 

109,521  00 

670  68 

44,142  30 

8  80 

22  28 

15,696  48 

99  90 

3,518  80 

3  04 

6.805  95 

3,674  78 

8,270  84 

462  30 

329  28 

43  74 

2,476  56 

533  96 

16,461  00 

l,36o  40 


Excess  of 
drawback 
over  du- 
ties. 


1,931  16 

455  26 


11,414  80 


1814.]  SECRETARY  OF  THE  TREASURY. 

Explanatory  Statements  and  Notes — Continued. 


549 


' 

Quantities. 

Rate  of 
duty. 

Excess  of 
duties  over 

Excess  of 

drawback 

g  All  other  articles — Continued. 

Excess  of 

Excess  o. 

drawback. 

over    du- 

importation 

exporta- 

ties. 

over    ex- 

tion over 

Cents. 

portation. 

importa- 
tion. 

Seines 

-    pounds 

83 

_ 

8 

6  44 

Cordage,  tarred 

do 

- 

14,358 

4 

- 

574  32 

do 

do 

- 

3,607 

2 

. 

72  14 

untarred     - 

do 

o3,561 

- 

5 

1,678  05 

Cables 

do 

149,684 

- 

4 

5,987  36 

Steel 

cwt. 

5,424 

- 

200 

10,848  60 

Twine 

do 

494 

- 

800 

3,950  93 

Glauber  salts 

do 

23 

- 

400 

91  93 

Coal 

-  -    bushels 

148 

- 

5 

7  40 

Do 

do 

25,183 

- 

10 

2,518  30 

Fish,  dried  or  smoked 

•     quintals 

1,381 

- 

100 

1,381  00 

pickled  salmon 

barrels 

365 

- 

200 

730  00 

mackerel 

do 

199 

- 

120 

238  80 

other  - 

do 

2,507 

- 

80 

2,005  60 

Glass,  bottles 

gross 

1,879 

- 

120 

2,254  80 

window,         8  by  10 

100  sq.ft. 

1,883 

- 

320 

6,025  60 

do             10  by  12 

do 

722 

- 

350 

2,527  00 

do  above  10  by  12 

do 

188 

- 

450 

846  00 

Cigars 
Do 

M. 

do 

3,448 

65 

400  7 
2OO5 

13,662  00 

Foreign  lime 

casks 

393 

- 

100 

393  00 

Boots 

-     '     pair 

146 

- 

150 

219  00 

Shoes  and  slippers,  silk 

do 

1,576 

- 

50 

788  00 

morocco,  &c. 

do 

4,814 

- 

30 

1,444  20 

for  children     - 

do 

1,063 

- 

20 

212  60 

Cards,  wool  and  cotton 

dozens 

92 

- 

100 

92  00 

playing 

packs 

540 

- 

25 

135  00 

do 

do 

72 

- 

50 

36  00 

Wax 

-     pounds 

1,442 

10 

- 

144  20 

' 

444,296  39 

14,591  88 

Deduct  excess  of  draw 

back, 

i 

14,591  88 

429,704  51 

Treasury  Department, 

Register's  Office,  January  30th,  1815. 

JOSEPH  NOURSE,  Register, 


550 


REPORTS  OF  THE 


[1814. 


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SECRETARY  OF  THE  TREASURY. 


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I]\rDEX. 


A. 

Agriculture,  the  effect  of  funding  the  public  debt  on,  6. 

productiveness  of,  contrasted  with  manufactures,  78. 
promoted  by  manufactures,  88,   92,   104. 
Alloy,  proportion  of,  used  in  gold  and  silver  coinage,  135,   141. 

why  it  is  used  in  coinage,   142. 
Annuity  proposed  as'a  plan  for  funding  the  public  debt,  17,  43,  99. 
Army  expenses  of  1802,  estimated,  222. 
of  1803,  estimated,  253. 
of  1804,  do  263. 

of  1805,  do         286. 

of  1806,         do         298. 

from  1st  April,  1801,  to  31st  March,  1805,  326, 
of  1807,  estimated,  331. 
of  1808,         do         358. 

paid,  374. 
of  1809,  estimated,  375,   392. 
paid,  399. 
from  1802  to  1807,  420. 
of  1810,  estimated,  400. 

paid,  421. 
of  1811,  estimated,  423. 
paid,  443,  466. 
of  1812,  estimated,  444. 
paid,  468,  484. 
of  1813,  estimated,  470,  489. 
paid,  490,  492,  499. 
of  1814,  estimated,  500. 
paid,  523,  532. 
of  1815,  estimated,  530. 

B. 


±5. 

Balances  m  the  Treasury,  in  1801,  223,  224. 

1802,  255. 

1803,  263. 

1804,  287. 

1805,  298. 

1806,  332. 

1807,  357. 

1808,  374. 

1809,  391,  399- 

1810,  422. 

1811,  443. 

1812,  468. 

1813,  488,  499.. 

1814,  525. 


554  INDEX. 

Bank,  plan  of  a  national,  proposed,  54,  72. 

capital  stock,  of  what  amount,  and  how  composed,  72. 
the  United  States  may  be  a  stockholder,  75. 
Bank  of  the  United  Si  ales,  a  renewal  of  the  charter  of,  recommended,  35$. 
Bank  shares,  dividends  on,  in  1801,  221. 
sold,  254. 
proceeds  of,  317. 
Banks,  benefits  resulting  from,  55,  97. 

number  of,  in  the  United  States  in  1790,  65. 
objections  to,  considered,  57. 
slock  of,  how  composed,  59. 
favor  the  increase  of  the  precious  metals,  61. 
tend  to-Lower  the  rate  of  interest,  67. 
Bounties  considered  as  a  mean  of  encouraging  manufactures,  110,  130. 

c. 

Claims  of  American  citizens  against  France,  amount  of  assumed  and  paid, 

264,   266,   288. 
Coffee,  additional  duty  on,  proposed,  22. 

imported  and  consumed  from   1790  to  179S,  quantity  of,  241. — See 

Merck  a  ndi.se  i  mported. 
Coins,  foreign,  comparative  value  of,  135,   142. 

circulation  of,  to  be  prohibited,  155. 
Coins  of  the  United  States,  of  what  to  be  composed,  and  how  denominated., 

152. 
Commercial  restrictions,  effects  of  on  the  revenue  in  1807-8.  398,  409. 
Commerce,  benefited  by  funding  the  public  debt,  5. 
promoted  by  manufactures,  90,   104. 
how  affected  b)   the  French  and  British  decrees,  376. 
Compensation  of  officers  of  government  in  1790,  45. 
Connecticut,  claim  of,  in  178y,  35. 
Creditors  of  the  United  States,  not  expedient  to  discriminate  between  the 

classes  of  the,  7. 
Credit. — See  Public  Credit. 
Customs,  where  paid,  and  the  amount,  from  1st  April,  1801,  to  31st  March,, 

1805,  319. 

D. 

Debt,  amount  of  interest  on  the  domestic,  from  1776  to  1791,  33. 
Debt— See  Public  Debt. 

Debts  due  to  States,  to  be  assumed  by  the  United  States,  10,  28. 
supposititious,  .account  of  the,  30. 
statement  of  the,  35. 
provision  for  liquidating,  164. 
Direct  taxes,  collected  in  1801,  221. 
arrears  of,  in  1803,  263. 
receipts  from,  in  1801  to  1805,  317. 
receipts  from,  in  1814,  524,  526. 
an  increase  of  the,  recommended,  531. — See  Revenue,  fyc. 


INDEX,  655 

Drawback  of  duties,  considered  in  reference  to  the  encouragement  of  man- 
ufactures, 114. 

amount  of,  from  1790  to  1799,  239. 
system  of,  proposed  to  be  modified,  378. — See  Mer- 
chandise imported. 
Duties,  additional,  proposed  on  wines,  spirits,  teas,  and  coffee,  22. 
Duties  on  Imports,  tariff  of,  proposed  to  be  modified,  2 IS,  227. 
cost  of  collecting  the,  218,  227. 

an  increase  of,  proposed,  219,  242,  378,  401,  424,  448. 
Duties  on  Imports  and  Tonnage,  estimated  for  1790,  53. 

for  1795,  170. 
Duties. — See  Internal  Duties,  Protecting  Duties,  Imports,  Merchandise., 
Dutch  debt,  created  in  1790,  166. 

amount  of,  in  1794,  206. 

amount  of,  in  1802,  225. 

instalments  payable  to  1809,  250. 

difficulties  in  remitting  instalments  of  the,  254,  260. 

amount  of  the,  in  1803,  276. 

E. 

Embargo,  its  effects  upon  the  revenue  considered,  377,  503. 
Estimates  of  receipts  and  expenditures  for  1791,  45,  53. 

1795,    170,  185,214. 

1801-2,  222. 

1802-3,  253. 

1803-4,   263. 

1804-5,  286. 

1805-6,  298. 

1806-7,   331. 

1807-8,   357. 

1808-9,    375. 

1809-10,  399. 

1810-11,  422. 

1811-12,  444,  448. 

1812-13,  469. 
,  1813-14,  488,  500. 

1814-15,  526,  530. 
Exemption  of  materials  for  manufactures  from  duty,  effect  of,  113, 
Expenditures. —See  Receipts  and  Expenditures*     - 
Exportation.  — See  Re-exportation. 

F. 

Finances,  the  effects  of  a  National  Bank  in  administering  the,  considered^,  54. 
Finances,  state  of  the,  in  1801,  216. 

1802,  252. 

1803,  262. 

1804,  285. 

1805,  297. 

1806,  331. 

1807,  356. 

1808,  373. 

1809,  (June,)  39L 
76 


556  INDEX. 

Finances,  state  of  the,  in  1S10,  (December.)  398. 
1810.  4.21. 
1811^  443. 

1812,  468. 

1813,  (June,)  488. 

1813,  {December )  499. 

1814,  523. 
'Fisheries,  benefited  by  manufactures,  107. 

Florida,  imports  and  exports  to  and  from,  for  the  years  1799  to  1802,  265, 

281  to  284. 
Foreign  intercourse,  expenses  of,  from  1801  to  1805,   325. — See   Receipts 

and  Expenditures. 
Foreign  Officers,  provision  made  in  1792,  for  paying  certain,  166. 
France,  claims Irgainst,  assumed  by  the  United  States  and  paid,  264-6,  288. 
F  ands  on  the  revenue,  how  prevented,  23. 
Funding  system  established  in  1790,   165. 

G. 

Gold  and  Silver,  amount  of  increased  by  establishing  banks,  55. 

proportion  of,  in  the  United  States,  in  1790,  estimated,  141. 

I. 

Imported  articles,  and  the  duty  on  each. — See  Merchandise  imported. 
Imports  from  Great  Britain  in  1810,  duties  accrued  on,  456. 

a  table  of  duties  chargeable  on  in  1801,  227. 
Imports,  value  and  quantity  of,  from  1790  to  1800,  229  to  238. 
amount  of  duties  accrued  on,  from  1790  to  1799,  239. 
quantity  of  consumed  in  the  United  States  from  1790  to  1798,  241. 
duties  accrued  on,  from  October  1S00,  to  October  1802,  259,  268. 
duties  accrued  on,  in  the  years  1802  and  1S03,  290.  > 

1S01  to   1804,  297,  302,  311. 
1804  and  1805,  337. 
1S05  and  1806,  362. 

1806  and  1807,  379. 

1807  and  1808,  403. 
1S08  and  1809,  426. 
1809.  and  1810,  451. 

1810  and  1811,  478. 

1811  and  1812,  505. 

1812  and  1813, 544.— See  Merchan- 
dise imported. 

Incidental  revenues  received  from  1st  April,  1801,  to  31st  March,.  1805*322. 

— See  Revenue. 
Internal  duties  created  in  1794,  159. 
Internal  duties,  receipts  from  in  1800,  218,  243. 

cost  of  collection,  219. 

receipts  from,  in  1801  to  1805,  317. 

outstanding,  amount  of  in  1803,  263. 

proposed  to  be  increased,  531. — See  Revenue. 
Internal  improvements,  surplus  revenue  may  be  applied  to,  359. 
Inventions  and  discoveries,  promote  manufactures,  114- 


INDEX.  557 

L. 

Lands. — See  Public  Lands. 

Laws  creating  revenue,  and  providing  for  the  public  debt,  reviewed,  157. 

Limitation  act,  passed  in  1793,    167. 

Loan  recommended  to  supply  a  deficiency  in  the  receipts,  392, 400,  423,  448, 

471,491.     ' 
Loans,  foreign,  amount  of  on  31st  December,  1789,  31. 
Loans  preferred  to  taxes  to  meet  the  exigencies  of  a  war,  377,  401. 
Loans,  amount  received  from,  in  1810,  443. 

1812,   468.  486. 
1S13,  488,  492,499,  516. 
1814,  524,  527. — See  Revenue.    . 
Loans,  terms  on  which  they  were  obtained,  441,  491,  492  to  498;  519  to 

522,  528;  535  to  540. 
Louisiana,  provision  for  the  purchase  of,  264. 

imports  and  exports  to  and  from,  for  the  years  1796  to  1802, 
265,  281  to  284. 

M. 

Manufactures  benefited  by  funding  the  public  debt,   6. 
expediency  of  encouraging,  78. 
advantages  of,  85. 
encourage  emigration,  87. 
effects  of,  on  commerce  and  agriculture,  90. 
objections  to  encouraging,   considered,   91,  103,  107. 
progress  of,  in  the  United  States,   102. 
necessary  to  the  independence  of  a  country,  106. 
sectional  jealousies  on  the  subject  of,  considered,  107. 
how  to  be  protected,   109. 

materials  for,  exempted  from  duty,  effect  of,  113. 
articles  of,  requiring  particular  encouragement,   118. 
Massachusetts,  amount  due  to,  in  1789,   35. 

Mediterranean  fund,     created  and  estimated  product  of  the,  for  1805,  286. 
duties  constituting  the,  cease  1st  January,  1809,  356. 
a  continuation  of  the,  recommended,  378,401,424,448. 
annual  amount  of. — See  Merchandise  imported,  and 
Revenue. 
Merchandise  imported  and  consumed,  from  1790  to  1S00,  237,  241. 
(paying  ad  valorem  duties)  in  1795  to  1800,  234. 
(the  quantity  re-exported  deducted)  in  1801,   312. 

1802,  270. 

1803,  291. 

1804,  303. 

1805,  338. 

1806,  368. 
1S07,  380. 
1808,  404. 

re-exported  in  1807  and  1808,  409. 

imported,  (the  quantity  re-exported  deducted,)  in  1809,  427.      t 

1810,  452. 

1811,  474. 
1S12,  506. 
1813,  545. 


558  INDEX. 

Mint,  plan  for  the  establishment  of  a,  133. 

expenses  of  a,  how  defrayed,   143,  150. 
organization  .of  a,  156; 
Molasses,  imported  and  consumed  from  1790  to  179S,  quantity  of,  241. — 
See  Merchandise  imported. 

N. 

National  bank  proposed  to  be  established,  54. 
Navy  expenses  of  1S02,  estimated,  222. 

1503,  253. 

1504,  263. 
._1805,  286. 

1806,  298.  rj    UT 

from  1st  April,  lS01,to  31st  March,  1805,  327. 
of  1807,  estimated,   3,31. 
1808,  358. 

paid,  374. 
1S09,  estimated,  375,  392. 
paid,  399. 
from  1802  to  1807,  420. 
of  1810,  estimated,  400. 
paid,  421. 

1811,  estimated,  423-. 
paid,  443,  466. 

1812,  estimated,  444. 
paid,  468,  484. 

1S13,  estimated,  470,  489. 
paid,   490,  492,  499. 

1814,  estimated,  500.  '     ' 
paid,   523,  532. 

1815,  estimated,  530. 
New  Jersey,  claim  of,  in  1789,,  35. 
New  York,  claim  of,  in  1789,  35. 

Non- importation  act,  modification  of  the,  proposed,  425. 

o. 

Officers  of  government,  compensation  allowed  to  the,  in  1790,  45. 


Paper  money,  the  expediency  of  emitting,  considered,  64. 

Passports  and  clearances,  amount  of   revenue  derived  from,   in   1790   to 

1798,  241. — See  Merchandise  imported. 
Penalties  and  forfeitures  for  infractions  of  the  revenue  laws,  to  be  distributed 

to  informers  and  custom-house  officers,  425. — See  Revenue. 
Postage  of  letters,  receipts  from,  in  1801  to  1805,  317. — See  Revenue. 
Post  Office,  revenue  derived  from  the,  to  be  applied  to  the  Sinking  Fund,  27 

review  of  the  law  establishing  the,   159. 
Premiums,  effect  of  granting,  on  agriculture  and  manufactures,  113. 


INDEX.  559 

Protecting  duties  on  imports,  considered  as  a  bounty  on  domestic  fabrics,  109. 
the  constitutional  power  to  levy,  considered,  112. 
Prohibitions  of  imports  and  exports  may  be  resorted  to  for  the  encourage- 
ment and  protection  of  manufactures,  109. 
Public  credit,  plans  for  the  support  of,   3,  157,  172. 

a  national  bank  necessary  to  the  support  of,  54. 
essential  to  the  prosperity  of  the  nation,  197. 
denned,   198. 
Public  debt,  advantages  of  funding  the,  5,  98. 

nature  of  the  provisions  for  funding  the,  7, 161. 

of  what  it  consists,  14,  16S,  347. 

plans  for  funding  the,   17,  43,  45,  161. 

plans  for  redeeming  the,  22,  27,  165. 

may  constitute  a  part,  of  the  capital  of  a  national  bank,  72., 

75,  157. 
laws  relating  to  the,  reviewed,  157. 
plan  for  completing  the  system  for  liquidating  the,  173. 
revenues  pledged  for  the  payment  of  the,   168. 
amount  of  foreign  and  domestic,  in  1790,  14,  22,  31,  33. 

1795,  169,  201  to  210. 
1802,  223,  248,  250,  279. 
when  it  may  be  redeemed,  estimated,  172,  225,  251,  354. 
amount  paid,  in  1802,  254. 

1803,  264,276. 

1804,  288,296. 

1805,  299,310. 

from  1st  April,  1801,  to  31st  March,  1S05,  328,  329,  333. 
in  1S06,  333,  345. 
plan  for  consolidating  the,  proposed,  333,  347  to  355. 
amount  of  the,  in  1806,   349. 

estimated  amount  that  may  be  paid  in  1809  to  1824,  354,  355. 
amount  paid  in  1807,  358,371. 
in  1808,  373,  389. 
amount  paid  from  1st  April,  1801,  to  Oct.  1809,  399,415to41S. 

1810,  423,  436. 
amount  paid  in  1811,  445,  461. 

amount  paid  from  1st  April,  1801,  to  1st  January,  1812,  463. 
amount  on  1st  January,  1812,  446,  464. 
amount  paid  in  1812,  46S,  480. 

1813,  492,  499,  514. 
'  1814,  534. 
Public  lunds,  not  taxable  nor  liable  to  sequestration,  192,  196. 
Public  lands,  may  be  applied,  in  part,  to  the  payment  of  the  public  debt, 
17,  18. 
proposed  as  a  premium  on  loans,  449. 
estimated  quantity  and  product  of  the,  in  1795  and  1S01,  161, 

219,  244. 
proceeds  of  the,  pledged  for  the  public  debt,  163. 
sold  in  1801,  220,246. 
intrusions  on  the,  to  be  prevented,  221, 
sold  in  1802,  252,  257. 


560  INDEX, 

Publie  lands,  sold  in  1803,  262,  274. 

1804,  285,  294,  315. 

1805,  297,  308. 

receipts  from,  in  1801  to  1805,  317. 
sold  in  1806,  331,  348. 

1807,  356,  368. 

1808,  373,  385. 

1809,  398,  411. 

sold  from  1S00  to  1810,  421,  432. 

in  1811J  448. 
may  be  applied  as  a  bounty  to  soldiers  enlisting,  448. 
—  sold  in  1812,  478. 
1813,  511. 
1S14,  550.  t 

Public  vessels  sold,  222. 

R. 

Receipts  and  expenditures,  estimated  for  1790,  45,  53. 

1795,  170. 
comparative  view  of  the,  for  1795,  214. 
in  1801,  216. 

1802,  252. 

1803,  262. 

1804,  2S5, 

1805,  297. 

from  1st  April,  1801,   to  31st  March,  1805,  317 

to  330. 
in  1806,  331. 

1807,  356. 

1808,  373. 

1809,  391,  395,  398,  419. 

1810,  421,  438. 
1811,443,  466. 

1812,  46S,  482,  486. 

1813,  488,  492,499,  516,  532. 

1814,  523,  533. 
Re-exportation  of  foreign  merchandise  in  1S07  and  180S,  409. 
Revenue,  frauds  of  the,  how  to  be  prevented,  23. 

plan  for  increasing  the,  24. 

laws  relating  to,  reviewed,  157. 

for  what  purposes  pledged,  168. 

how  to  be  increased  in  the  event  of  war,  361,  378. 

anincreaseof  proposed,  219,  242,  378,  401,  424,  448,  504. 

from  what  sources  derived,  and  the  amount  in  1795,  157, 167. 

1801,  216. 

1S01  to  1805,  317, 
322. 

1508,  395. 

1509,  419. 
1810,  43S. 
1811,466. 


INDEX.  561 

Revenue,  from  what  sources  derived,  and  the  amount  in  1812,  482,492. 

1813,492,516,518. 
1814,  532-3. 
See  Receipts  and  Expenditures. 

s. 

Salt  imported  and  exported  from  1790  to  1800,  233. 

and  consumed  from    1790   to  1798,   quantity  of,   241. — See 
Merchandise  imported. 
Salt  duty  expires  1st  January,  180b,  356. 

a  renewal  of  the,    recommended,   449,  490. — See   Merchandise 
imported. 
Sinking  Fund,  plan  of  a,  proposed,  27. 

established  in  1790,  165,  171. 
made  permanent  in  1792,  166,  169. 
operations  of  the,  to  1st  January,  1795,  167?  171,  211. 
proceedings  of  the,  in  1802,  260. 
state  of  the,  in  1806,  346. 
in  1810,  440. 
in  1813,  498. 
South  Carolina,  claim  of,  in  1789,  36. 
Specie  increased  by  the  operation  of  banks,  35. 
Specie  payments  suspended  by  banks,  529. 
Spirits  imported  in  1792  to  1799,  quantity  of,  paying;  duties,  235. 

and  consumed  in    1790  to  1798,   quantity    of,    241. — See 
Merchandise  imported. 
Spirits,  foreign  and  domestic,  additional,  duties  proposed  on,  22. 
Stamp  duties  expire  4th  March,  1803,  218,  221. — See  Revenue. 
State  debts,  ought  to  be  assumed  by  the  Union,  14,  28,  30. 
i   amount  of,  estimated,  35,  36. 
provision  for  liquidating  the,  164. 
Stocks  of  the  United  States,  not  taxable,  192. 
Sugar  imported  .and  consumed   in  1790  to   1798,   quantity  of,   241. — See 

Merchandise  imported. 
Surplus  revenues,  may  be  applied  to  internal  improvements,  359. 

T. 

Taxes  internal,  proposed  to  be  levied,  449,  490. — See  Direct  Taxes. 
Teas,  additional  duties  on,  proposed,  22. 

imported  in  1790  to  1800,  quantity  of,  paying  duties,  236. 
estimated  quantity  of,  consumed  during  the  years  1790  to  1798,  241 , 
— See  Merchandise  imported. 
Tonnage,  amount  of  American  and  foreign,  from  1790  to  1799,  240. 

1800  to  1802,  269. 
in  1S03,  290. 

1804,  302. 

1805,  337. 

1806,  362. 
1S07,  379. 

?  1808,  394,  403. 


562  INDEX. 

Tonnage,  amount  of  American  and  foreign,  in   1809,  426. 

1810,  451. 
1811,473. 

1812,  505. 

1813,  544. 
Tontine,  proposed  as  a  plan  for  funding  the  public  debt,  20,  45. 
Treasury  Notes,  amount  authorized  in  1812,  469,  492. 

1813.  492,  499,  51S. 

1814,  525,  528,  532,  541-2. 
in  circulation  in  1814,  529. 

■     an  increase  of  the  rate  of  interest  on,  proposed,  53<h 

V. 

Virginia,  claims  of,  in  1789,  36. 

w. 

Wines,  additional  duties  proposed  on,  22. 

imported  and  consumed,  quantity  of,  from  1790  to  1798,  241. — See 
Merchandise  imported. 


END  OF  THE  FIRST  VOLUME. 


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